The ultimate purpose of an economic model is to
a. explain reality as completely as possible
b. establish assumptions that closely resemble reality
c. help us understand economic behavior
d. determine what each decision maker wants to maximize
e. guide government policy decisions
C
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Excess demand in an unregulated market will cause the price of a product to fall
Indicate whether the statement is true or false
It may be that unions increase worker productivity by
a. minimizing conflicts, resolving differences, and reducing job turnover b. using seniority rules to keep the most experienced workers employed c. increasing job turnover so that the least experienced workers quit d. allowing workers to goof off, which improves morale e. increasing the number of workers required to perform each task
The GDP figure does not accurately reflect economic welfare because
a. it does not include non monetary transactions. b. the value of goods produced in the home is usually overstated. c. it includes only consumption goods and services. d. it usually includes an overstated estimate of social costs.
In the market for yen, an increase in U.S. real interest rates tends to
A. decrease demand. B. increase equilibrium price. C. increase excess demand. D. cause no change in equilibrium price.