A common approach that economists use to understand, explain and predict economic phenomena is to
A) form a theory or model.
B) conduct experiments in a science lab.
C) ask what people think.
D) examine people's thought processes.
Answer: A
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It makes sense to measure relative costs in terms of leisure time
A) because leisure time is of equal value to everyone. B) because leisure time is the ultimate good. C) only if leisure time is of equal value to everyone. D) only in societies with labor-saving technologies.
“Fiscal policy” is the federal government’s plan for
A. international trade, designed to balance exports and imports. B. spending and taxes, designed to influence the level of aggregate demand. C. manipulating the money supply and the control of interest rates. D. All of the above are correct.
If the Gross Domestic Product (GDP) in the United States increases, which of the following will probably result?
a. Employment levels will increase. b. Employment levels will remain flat. c. Unemployment rates will increase. d. Wages will increase.
Which statement best characterizes the long-run decline in the agricultural industry?
A. The growth in the demand for farm products has exceeded the growth in the supply of such products, causing rising farm product prices and falling farm income B. The growth in the supply of farm products has exceeded the growth in the demand for such products, causing falling farm product prices and falling farm income C. The supply of farm products has increased while the demand for such products has decreased, causing falling farm product prices and falling farm income D. The demand for farm products has increased while the supply of such products has decreased, causing rising farm product prices and rising farm income