Ch1.The fallacy of composition is the fallacious view that
What will be an ideal response?
what is true for the individual will also be true for the group.
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A beneficial oil-price shock increases labor demand. What happens to current employment and the real wage rate?
A) Both employment and the real wage rate would increase. B) Both employment and the real wage rate would decrease. C) Employment would increase and the real wage would decrease. D) Employment would decrease and the real wage would increase.
A decrease in German Treasury interest rates, all else held constant, causes a leftward shift in the __________ euros and causes the dollar to __________ against the euro
A) supply of; appreciate B) supply of; depreciate C) demand for; appreciate D) demand for; depreciate
A manager of a clothing firm is deciding whether to add another factory in addition to one already in production. The manager would compare
a. The total benefits gained from the two factories to the total costs of running the two factories. b. The incremental benefit expected from the second factory to the total costs of running the two factories. c. The incremental benefit expected from the second factory to the cost of the second factory d. The total benefits gained from the two factories to the incremental costs of running the two factories.
The fractional reserve system of banking started when goldsmiths began:
A. charging people who deposited their gold. B. accepting deposits of gold for safe storage. C. issuing paper receipts in excess of the amount of gold held. D. using deposited gold to produce products for sale to others.