Because models are used to explain economic behavior
A) the assumptions must be complex while the models themselves are simple.
B) models must be complex.
C) models must be simple.
D) models can be either simple or complex so long as it explains economic behavior.
Answer: D
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Which of the following could explain why there is an increase in potential GDP but the equilibrium level of GDP does not rise?
A) SRAS shifted to the right by more than LRAS. B) AD shifted to the right by more than SRAS. C) SRAS and AD do not shift. D) AD shifted to the right by less than SRAS.
Special-interest legislation usually
a. has widespread benefits and costs b. has concentrated benefits and costs c. has concentrated benefits but widespread costs d. concerns the provision of public goods e. concerns the provision of private goods
If the total budget deficit is $200 billion and the deficit at full employment is $120 billion, then the
A. Structural deficit is $80 billion. B. Cyclical deficit is $120 billion. C. Cyclical deficit is $80 billion. D. Structural deficit is $320 billion.
What price should a firm charge for a package of five ties given a marginal cost of $5 and an inverse demand function P = 10 ? Q by the representative consumer?
A. $50 B. $12.50 C. $37.50 D. $25