When is a hypothesis accepted?
a. if it uses plausible abstractions
b. if it uses general assumptions
c. if it fits well with the facts.
d. if it reflects a complex view
c. if it fits well with the facts.
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When we compare economic welfare in a monopoly market to a competitive market, the profits earned by the monopolist represent
a. a loss in total welfare. b. a transfer of benefits from the buyer to the seller. c. the higher marginal costs incurred by the monopolists in comparison to competitive firms. d. All of the above are correct.
Refer to Figure 36.3 for the dollar-Swiss franc foreign exchange market. Which of the following is true?
A. An increase in supply from S1 to S2 could be caused by an increase in Swiss demand for U.S. corn. B. An increase in supply from S1 to S2 could be caused by an increase in the U.S. demand for Swiss chocolate. C. The Swiss franc appreciates in value compared to the U.S. dollar when supply decreases from S2 to S1. D. The U.S. dollar appreciates in value compared to the franc when supply increases from S1 to S2.
The sum of national saving and capital inflows from abroad must equal:
A. capital outflows. B. aggregate demand. C. domestic investment in new capital goods. D. the trade deficit.
In an open economy with flexible exchange rates, monetary policy affects ________ through changes in the real interest rate and affects ________ through changes in the exchange rate.
A. productivity and growth; consumption B. taxes and saving; net exports C. consumption and investment; net exports D. net exports; taxes and saving