Which of the Following Would Likely Be Studied by a Microeconomist

question 42

Multiple Choice

Which of the following would likely be studied by a microeconomist rather than a macroeconomist?

• A)the effect of foreign direct investment on economic growth
• B)the effect of a sales tax on the cigarette industry
• C)the effect of an investment tax credit on the economy's capital stock
• D)the effect of a war on government spending

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Definitions:

Marginal Tax Rate

The rate at which the next dollar of taxable income will be taxed.

Operating Costs

Expenses associated with the day-to-day functions of a business, excluding financial costs.

Depreciation

The accounting process of allocating the cost of tangible assets over their useful lives, reflecting the reduction in value over time.

Working Capital

The difference between a company's current assets and current liabilities, indicating the amount of liquid assets the company has available to build its business.