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SolutionstoQuickQuizzesChapter1thefrontier),pointBisaninef-Microeconomicsisthestudyof1.Therearemanypossibleanswers.ficientpoint(insidethefrontier),howhouseholdsandfirmsmakeandpointCisaninfeasiblepointdecisionsandhowtheyinteractin2.Therearemanypossibleanswers.(outsidethefrontier).markets.Macroeconomicsisthe3.Thethreeprinciplesthatdescribestudyofeconomy-widephenom-howtheeconomyasawholeena,includinginflation,unem-worksare:(1)acountry’sstandardployment,andeconomicgrowth.oflivingdependsonitsability2.Anexampleofapositivestate-toproducegoodsandservices;Cmentis“ahigherpriceofcoffee(2)pricesrisewhenthegovern-causesmetobuymoretea.”Itismentprintstoomuchmoney;andapositivestatementbecauseitisA(3)societyfacesashort-runtrade-aclaimthatdescribestheworldoffbetweeninflationandunem-asitis.Anexampleofanorma-ployment.Acountry’sstandardtivestatementis“thegovernmentoflivingdependslargelyontheBQuantityofClothingProducedshouldrestraincoffeeprices.”Itproductivityofitsworkers,whichisanormativestatementbecauseinturndependsontheeducationitisaclaimthatprescribeshowofitsworkersandtheaccessitstheworldshouldbe.ManyotherworkershavetothenecessaryQuantityofFoodProducedexamplesarepossible.toolsandtechnology.PricesriseFigure1PartsofthegovernmentthatwhenthegovernmentprintstooregularlyrelyonadvicefrommuchmoneybecausemoremoneyTheeffectsofadroughtareeconomistsaretheDepartmentincirculationreducesthevalueofshowninFigure2.ThedroughtoftheTreasuryindesigningtaxmoney,causinginflation.Societyreducestheamountoffoodthatpolicy,theDepartmentofLaborfacesashort-runtrade-offbetweencanbeproduced,shiftingtheinanalyzingdataontheemploy-inflationandunemploymentthatproductionpossibilitiesfrontiermentsituation,theDepartmentofisonlytemporary.Policymakersinward.Justiceinenforcingthenation’shavesomeshort-termabilitytoantitrustlaws,theCongressionalexploitthisrelationshipusingvari-BudgetOfficeinevaluatingpolicyouspolicyinstruments.proposals,andtheFederalReserveinanalyzingeconomicdevelop-Chapter
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