Theory in economics
a. involves some simplification of reality
b. bears no relation to reality
c. approaches reality in all its complexity
d. involves so much distortion of reality that it is worthless
e. focuses on the unique aspects of each situation
A
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The economy needs some unemployment to operate efficiently, because without it
A) workers will find it difficult to find a job, leading to reduced wages and prices. B) firms will find it difficult to recruit workers, leading to increased wages and prices. C) firms will find it difficult to recruit workers, leading to reduced wages and prices. D) workers will find it difficult to find a job, leading to increased wages and prices.
Refer to Scenario 14.2. If each unit of output sells for $5, how many days of labor will the firm hire to maximize profit?
A) 1 B) 2 C) 3 D) 4 E) 5
If 81 percent of Canada's exports go to the United States, a recession in the United States would probably:
a. lead to an economic boom in Canada. b. have no impact on Canada's economy. c. increase imports from Canada. d. decrease Canada's domestic real GDP. e. increase the per capita income in Canada.
The sale of government securities by the Fed will cause
a. a decrease in both the monetary base and the money supply. b. an increase in both the monetary base and the money supply. c. an increase in the monetary base but no change in the money supply. d. a decrease in the monetary base but no change in the money supply.