The assumption of rational behavior:
A. offers a perfect framework for how people actually behave.
B. helps economists explain about how people behave in a way that will best achieve their goals.
C. is best applied to psychology and should not be used in the science of economics.
D. explains why people voluntarily engage in decisions for which costs exceed benefits.
Answer: B
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After 15 years with Ford Motor Corporation, one summer Cameron loses his job. His boss explained that his position has been downsized after the technological advances in automobile production. Cameron is best considered
A) not in the labor force. B) frictionally unemployed. C) structurally unemployed. D) cyclically unemployed. E) avoidably unemployed.
When a recession ends, the turning point that immediately follows is called a
A) trough. B) peak. C) depression. D) None of the above answers is correct.
In the IS-LM model, an easy monetary in conjunction with a tight fiscal policy
a. increases exports and decreases imports. b. decreases exports and increases imports. c. encourages foreign capital inflows to the U.S. d. both b and c. d. None of the above
_____ is embodied in the notion of a social welfare function
a. Progressivism b. Socialism c. Utilitarianism d. Social insurance