Behavioral economics is an approach to the study of consumer behavior
A) that emphasizes psychological limitations and complications that potentially interfere with rational decision making.
B) that emphasizes the capabilities of individuals to succeed in attaining all their unlimited wants utilizing limited resources.
C) that, in contrast to standard approaches in economics, utilizes the ceteris paribus assumption.
D) that, in contrast to standard approaches in economics, relies on real-world data to evaluate the usefulness of economic models.
A
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Something becomes money only if
A) people use it as a general medium of exchange. B) it is backed by another commodity, typically gold or silver bullion. C) the central government says it's money. D) it promises to pay the bearer a fixed quantity of a scarce metallic good.
When a country's ability to maintain its fixed exchange rate is doubted by investors:
A. it may fall under a speculative attack. B. the exchange rate is likely to spiral upward, out of control. C. the value of its currency tends to appreciate too quickly. D. All of these statements are true.
In the long run, a decrease in the money supply growth rate
a. reduces expected inflation so the long-run Phillips curve shifts left. b. reduces expected inflation so the short-run Phillips curve shifts left. c. Both A and B are correct. d. None of the above is correct.
Relating to the Economics in Practice on page 340: Europe has a carbon tax, and electricity producers are among the largest of the carbon producing firms. The carbon tax increases the costs of the electricity producers, which will shift the ________ curve in the electricity market to the ________.
A. demand; right B. demand; left C. supply; right D. supply; left