One major assumption of economics is that people
A) act as if they systematically pursue self-interest.
B) behave randomly without any predictable pattern.
C) are sometimes rational and sometimes irrational.
D) always pursue the interests of others.
Answer: A
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Refer to Figure 10-6. A change in income is shown in
A) Panel A. B) Panel B. C) Panel C. D) none of the above panels.
If a profit-maximizing firm finds that price exceeds average variable cost and marginal cost is greater than marginal revenue, it should: a. reduce output, but continue producing in the short run. b. increase output
c. shut down. d. not alter its production level since it is earning a profit.
Graphically illustrate and explain the effects of an increase in population growth on the Solow growth model. In your answer, you must clearly label all curves and the initial and final equilibria. In your answer, explain what happens to the rate of growth of output per worker and the rate of growth of output as the economy adjusts to this increase in population growth
What will be an ideal response?
Using the Taylor rule, if the current inflation rate equals the target inflation rate and real GDP is greater than potential GDP, then the federal funds target rate ________ the sum of the current inflation rate plus the real equilibrium federal funds
rate. A) will be greater than B) will be less than C) will be the same as D) may be greater than or less than