Why do economists make assumptions?
a. to create and thereby make economics more interesting
b. to reflect and thereby make the past more understandable
c. to complicate and thereby reflect the world more accurately
d. to simplify and thereby make the world more understandable
d. to simplify and thereby make the world more understandable
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The opportunity cost of a movement from point N to J would
A. be the lost production of some capital goods.
B. be the lost production of some consumer goods.
C. be slower economic growth in the future.
D. not involve any sacrifice of either capital or consumer goods.
A profit-maximizing monopoly will always produce at the minimum point of its average total cost (ATC) curve
a. True b. False
In periods of generally rising prices,
a. real GDP will grow faster than nominal GDP. b. nominal GDP will grow slower than real GDP. c. real GDP will grow slower than nominal GDP. d. real GDP and nominal GDP will grow at the same rate.
As a result of the given transactions, the supply of money in the economy will:
Answer the question on the assumption that the legal reserve ratio is 20 percent. Suppose that the Fed sells $500 of government securities to commercial banks (paid for out of commercial bank reserves) and buys $500 of securities from individuals, who deposit the cash in checking accounts. A. remain unchanged. B. rise by $500. C. fall by $100. D. fall by $500.