Behavioral economists have found that people ________, and this leads to irrational decisions.
A. often undervalue opportunity costs
B. often forget money is fungible
C. often forget to ignore sunk costs
D. All of these statements are correct.
Answer: D
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The real business cycle theory is most closely related to
a. Keynesian theory. b. monetarist theory. c. the classical model. d. the new Keynesian model.
Which of the following statements about purchasing power parity (PPP) is most likely correct?
a. PPP exchange rates fluctuate considerably over the short term but do not fluctuate from year to year. b. PPP exchange rates stay fairly constant and change only modestly, if at all, from year to year. c. PPP exchange rates stay fairly constant over the short term, but fluctuate considerably from year to year. d. PPP exchange rates do not fluctuate over the short term or from year to year.
If the prices of imported resources decrease, then this event would most likely:
a. Decrease aggregate supply b. Increase aggregate supply c. Increase aggregate demand d. Decrease aggregate demand
Mortgage lenders often resell mortgages in secondary markets. How might this make lenders act differently than if they intended to hold the mortgages themselves?
What will be an ideal response?