An example of a microeconomic decision is a situation in which
A) the Federal Reserve considers how much to increase the money supply during the coming month in an effort to constrain the rate of inflation.
B) Congress and the president seek to reach a compromise on how much to increase government spending in an effort to influence national expenditures.
C) a firm evaluates how much to reduce the price of its product in an effort to influence sales and boost its profits.
D) the U.S. Treasury contemplates buying foreign currencies in an effort to influence exchange rates with an aim to boosting demand for U.S. goods and services.

Question

Quizplus · Accepted Answer

A microeconomic decision involves an individual firm, consumer, or market rather than the whole economy. A firm's decision to reduce its price to influence sales and profits is an example of a microeconomic decision. The other options are macroeconomic decisions involving large policy decisions affecting the entire economy.

An Example of a Microeconomic Decision Is a Situation in Which