An appropriate test of the effectiveness of an economic model is
A) the number of variables contained within the model.
B) the model's ability to predict future economic activity.
C) the number of economists who have worked on the model.
D) the number of assumptions which the economist has made.
B
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If the reserve ratio is raised, the money multiplier
A) stays the same. B) is doubled. C) is lowered. D) is increased.
If the quantity supplied increases by 8 percent when the price rises by 2 percent, the price elasticity of supply is ________
A) 10.0 B) 6.0 C) 0.25 D) 16.0 E) 4.0
The U.S. economy experienced fluctuations in employment and output over the last half of the twentieth century. However, the length of the average recession has been about the same as the length of the average expansion
a. True b. False
According to the textbook, if a wave of pessimism cause stocks to become generally overvalued, the best investment strategy is to
A. sell as many stocks as possible. B. continue to diversify your investment portfolio. C. buy only government bonds. D. hold all available stocks and sell them later.