Which of the Following Is a Fundamental Question of Macroeconomics

question 26

Multiple Choice

Which of the following is a fundamental question of macroeconomics?

• A)What mechanism could force people to pollute less?
• B)Where is the stock market heading?
• C)Should governments act to smooth business cycles?
• D)What is the impact of government provided health care?
• E)How should governments be elected?

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Definitions:

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Shut Down

A short-term decision by a firm to cease production due to market conditions, not covering variable costs in the short run.

Average Variable Cost

The total variable costs divided by the quantity of output produced.

Perfectly Competitive

A market structure characterized by many buyers and sellers, identical products, and free entry and exit, leading to price determination by supply and demand.