If (T ? G) = (X ? IM), then (S ? I)
a. is greater than zero.
b. is zero.
c. is less than zero.
d. cannot be calculated.
b
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A critical assumption differs from a simplifying assumption in that a critical assumption
a. is a means of getting rid of extraneous details in the model b. cannot affect the conclusions of the model c. can affect the conclusions of the model d. is rarely used in economic models e. is never a fundamental assumption
According to the classical model, if there are too many elementary school teachers in the labor market,
a. the government should institute a retraining program to give the unemployed teachers new job skills b. the wages for elementary teachers will fall, eventually causing the number of excess teachers to shrink c. the wage for elementary teachers will increase for those who are employed, but unemployment of teachers will remain high d. this situation provides an example of cyclical unemployment, which often occurs in the long run e. people will quit training to become elementary school teachers and soon there will be a shortage in this labor market
If firms become more pessimistic about future sales, then
A. There will be a leftward movement along the AD curve. B. There will be a rightward movement along the AD curve. C. The AD curve will shift to the left. D. The AD curve will shift to the right.
In Figure 4.2, at quantities larger than Q1, demand is:
A. inferior. B. elastic. C. inelastic. D. unit elastic.