Economic models are used to
A. exactly replicate reality.
B. predict all possible outcomes of a study.
C. determine the thoughts of individuals.
D. simplify reality to predict outcomes.
Answer: D
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When the factor market is purely competitive, the firm's average expenditure curve for a factor of production is
A) upward sloping and to the right of the marginal expenditure curve. B) downward sloping and to the right of the marginal expenditure curve. C) identical to the marginal expenditure curve. D) downward sloping and to the left of the marginal expenditure curve.
Lower prices are a signal of the scarcity of a resource.
Answer the following statement true (T) or false (F)
Recovery is the phase of the business cycle during which real GDP reaches its maximum
a. True b. False Indicate whether the statement is true or false
Aggregate demand shows the relationship between: a. price levels and the number of goods that consumers buy during a given period of time
b. goods that are not purchased during a given period of time and the wealth created during the given period of time. c. the amount of investment spending and the market interest rate of an economy. d. the price level and the quantity of all goods sellers are willing and able to provide during a given period of time.