An economic model:
A. is so abstract that it cannot be applied to real-world events.
B. applies economic theory to understand real-world events.
C. is an action taken to influence the course of economic events.
D. can be used only to understand free markets.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
At the full-employment equilibrium in the labor market
A) there is no unemployment. B) there are no job vacancies. C) there is neither a shortage nor a surplus of labor. D) the money wage rate equals the real wage rate.
What is meant by consumer sovereignty?
What will be an ideal response?
An item to which a business holds legal claim is called a(n)
A) asset. B) liability. C) loan. D) time deposit.