Why do almost all models begin with assumptions?
What will be an ideal response?
Researchers develop a model that is a simplified description of reality to study a problem at hand. Real world phenomena are often very complex thus making them difficult to analyze in their true form. Therefore, assumptions are required to simplify complex phenomena and help researchers to make good predictions for the future.
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Which supports the economist's claim that buyers don't compete against sellers?
A) Diners would rather have more restaurants to choose among. B) Music buyers prefer having access to internet music stores compared to only the local music shop in town. C) Car buyers prefer several dealerships in the region compared to only one. D) Homebuyers prefer a larger selection of homes to a smaller one. E) All of the above.
When the domestic currency is initially overvalued in a fixed exchange rate regime, the central bank must intervene in the foreign exchange market to ________ the domestic currency, thereby allowing the money supply to ________
A) purchase; decline B) sell; decline C) purchase; increase D) sell; increase
The primary goal of supply-side economics is to
a. balance the federal budget. b. reduce the balance of payments deficit. c. reduce the money supply. d. reduce inflation and increase growth at the same time.
Twelve Federal Reserve Districts operate independently but with supervision
What will be an ideal response?