Which of the following statements most likely lies within the realm of microeconomics?
A)Unemployment rises during a recession and falls during an expansion.
B)A rapid acceleration of the supply of money may create inflation.
C)An increase in government spending will increase the aggregate demand for goods and services in the economy.
D)An increase in labor costs will increase the additional cost of producing another airplane.
E)A decrease in federal income tax rates will stimulate increased consumer spending.

Question

Quizplus · Accepted Answer

The statement "An increase in labor costs will increase the additional cost of producing another airplane" deals with the specific behavior of a single firm or industry, and is therefore within the realm of microeconomics. The other statements deal with broader economic factors such as inflation, government spending, and aggregate demand, which are more related to macroeconomics.

Which of the Following Statements Most Likely Lies Within the Realm