In the winter quarter at Frozen U. one year, snow falls every Friday night. Students conclude that, on their campus, Fridays cause snow. This hypothesis
A. should more properly be considered a theory.
B. assumes that correlation implies causation.
C. assumes that causation implies correlation.
D. reflects the fallacy of composition.
Answer: B
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The simple deposit multiplier is
A) the reciprocal of the required reserve ratio. B) always 1. C) the same as the required reserve ratio. D) different from bank to bank even if the required reserve ratio is the same for all banks.
If the government enacts contractionary fiscal policy, it is most likely at which of the following equilibria in the graph shown?
A. A B. B C. C D. D
The government is likely to block a merger if:
A. the firms remaining would all earn economic profit. B. it can be established that the merger would substantially reduce competition. C. the firms remaining would be able to charge a price above marginal cost. D. the firms that are merging are producing different products.
As the accounting industry expands, the demand for certified public accountants (CPAs) also increases, which causes the salaries of CPAs to increase. This is an example of
A. diseconomies of scale. B. increasing marginal returns. C. economies of scale. D. constant returns to scale.