A hypothesis is:
a. a normative economic statement
b. a testable proposition.
c. a statement that cannot be evaluated using real-world data.
d. a model with no connection to the real world.
b
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In order to fund industrywide advertising, managers of trade associations often try to charge the members that receive a lower marginal benefit from advertising ________.
A) a high fee B) the total cost of the advertising C) nothing D) a lower fee
A person who believes the economy is self-regulating also believes that
A) when there is a surplus in the labor market, the wage rate falls, and when there is a shortage in the labor market, the wage rate rises. B) it is better if the economy is in an inflationary gap than a recessionary gap. C) prices are flexible but wages are not. D) the economy is always in long-run equilibrium. E) the real balance effect does not operate in a recessionary gap.
Technological advance is shown as a(n):
A. movement from a point inside a production possibilities curve to a point on the curve. B. movement along a production possibilities curve. C. outward shift of a production possibilities curve. D. inward shift of a production possibilities curve.
If the Federal Reserve sells $200 of securities through a commercial bank when the reserve requirement is 10 percent, the maximum potential change in the money supply is
A. a $200 decrease. B. a $2,000 increase. C. a $2,000 decrease. D. a $200 increase.