Which one of the following states a central element of the economic way of thinking?
a. Scarce goods are priceless.
b. Incentives matter--human choice is influenced in predictable ways by changes in personal costs and benefits.
c. The realism of the assumptions is the best test of an economic theory.
d. When deciding how to allocate time, the concept of opportunity cost is meaningless.
B
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Germany and Japan pay a higher price for raising capital because of
A) having rather illiquid securities markets. B) unresolved stockholder-lender and manager-stockholder conflicts. C) allowing banks to hold substantial ownership shares in large firms. D) shutting large firms out of those securities markets.
Rational expectations theory is the concept that only unanticipated or surprise policies can influence inflation
a. True b. False Indicate whether the statement is true or false
The supply of Thai baht in the foreign exchange market originates with:
a. tourists who go on vacation to Thailand. b. the export of Thailand oranges and other goods. c. Thai residents who wish to purchase goods from other countries. d. the Thai royal family. e. Thai central bank intervention to stop the peseta from depreciating.
A demand schedule's position is determined partly by the supply of a good
a. True b. False Indicate whether the statement is true or false