Which Is a Microeconomic Question, Rather Than a Macroeconomic Question

question 56

Multiple Choice

Which is a microeconomic question, rather than a macroeconomic question?

• A) Will a decrease in the income tax rate lift the nation out of a recession?
• B) Will an increase in consumer spending cause inflation?
• C) Will a decrease in the income tax rate lead to a government budget deficit?
• D) Will an increase in the cigarette tax reduce the number of packs sold?

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Definitions:

Price Supports

Government interventions to maintain the market price of a commodity or product at a certain level, often to protect producers from market fluctuations.

Marketing Loan Program

A federal farm subsidy under which certain farmers can receive a loan (on a per-unit-of-output basis) to plant a crop and then, depending on the harvest price of the crop, either pay back the loan with interest or keep the loan proceeds while forfeiting their harvested crop to the lender.

Loan Price

The total financial cost of borrowing, including interest rates and any additional fees charged by the lender.

Crop Price

The market value at which a crop is traded, determined by supply and demand factors.