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
C
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Stagflation usually results from
A) a supply shock. B) an increase in aggregate supply. C) a decrease in aggregate demand. D) an increase in aggregate demand.
If wages instantaneously adjust to reflect expected inflation that is based on an anticipated increase in the money supply,
A) the aggregate demand and positively sloped aggregate supply curve shift to the right at the same time. B) the positively sloping aggregate supply curve shifts to the left after the aggregate demand curve shifts to the right. C) the positively sloping aggregate supply curve shifts to the left before the aggregate demand curve shifts to the right. D) the positively sloping aggregate supply curve does not shift to the right at the same time as the aggregate demand curve shifts to the left.
If the interest rate is 10%, then $1 received one year from now is worth how much today?
A) $1.10 B) $1 C) 91¢ D) 90¢
Stock options have been shown to not align the work of the CEO with the interests of shareholders
Indicate whether the statement is true or false