In constructing models, economists
A. make simplifying assumptions.
B. consider all factors that can change.
C. include all available information.
D. attempt to duplicate the real world.
Answer: A
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Explain the meaning of the word "convergence" in the context of economic growth and standards of living
What will be an ideal response?
In the long run,
a. large government budget deficits cause productivity to increase, thereby leading to inflation b. large government budget deficits drive down interest rates and reduce investment spending c. large government budget surpluses mean reductions in the money supply d. changes in the government budget deficit have no effect on the capital stock e. large government budget deficits drive up interest rates and reduce investment spending
Assume that C = $1,500 + 0.80(Y) and intended investment = $500 . Then the equilibrium level of national income is
a. $24,000 b. $20,000 c. $19,000 d. $15,000 e. $10,000
The term transfer payments refers to
A. Federal income taxes. B. Additional profits transferred to monopolies as a result of their market power. C. Payments to individuals that are not in exchange for current goods and services being produced. D. Money that is transferred between savings and checking accounts.