Real disposable income is held constant when constructing a consumption function
a. True
b. False
Indicate whether the statement is true or false
False
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Empirical support for the Heckscher-Ohlin model was weakest when the study applied
A) all of the assumptions of the model. B) all of the assumptions of the model except that regarding technology. C) all of the assumptions of the model except those regarding technology, goods and shipping costs. D) all of the assumptions of the model except those regarding technology, shipping costs and gravity. E) all of the assumptions of the model except those regarding shipping costs.
A model that is composed of many equations that show the channels through which monetary and fiscal policy affect aggregate output and spending is called a
A) reduced-form model. B) median-voter model. C) informed median-voter model. D) structural model.
The central reason why there are gains from international trade is because
A. trading allows otherwise unemployed people to have jobs. B. the rate of interest is not the same in all countries. C. resources are not equally distributed to all nations. D. those nations with absolute advantages in producing many goods can produce all of those goods at lower opportunity costs than other countries.
Consider firms operating in an industry where the own price elasticity of demand is infinite; that is, EQ,P = -?. Use this information to determine the type of industry in which these firms operate and the optimal advertising-to-sales ratio.
A. Monopolistic industry and 0 B. Perfectly competitive industry and 0 C. Perfectly competitive industry and ? D. Monopolistically competitive industry and ?