A theory or a model
A) is a simplified, abstract view of reality.
B) is based on each economist's value judgments.
C) is a detailed analysis of what ought to be.
D) captures all aspects of the real world.
Answer: A
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Money is any commodity or token that is
A) issued by the government. B) backed by gold. C) generally accepted as a means of payment. D) a store of value. E) generally accepted as a means of measurement.
A persistent surplus of pounds at a given fixed exchange rate (in dollars per pound) is evidence that the pound is ________ versus the dollar. This surplus can be reduced or eliminated through a ________ of the pound
A) overvalued; revaluation B) overvalued; devaluation C) undervalued; devaluation D) undervalued; revaluation
If some industries exhibit internal increasing returns to scale in each country, we should not expect to see
A) perfect competition in these industries. B) intra-industry trade between countries. C) inter-industry trade between countries. D) high levels of specialization in both countries. E) increased productivity in both countries.
Marginal revenue product is increasing as
A. the marginal physical product is increasing, other things equal. B. the amount of time is increasing, other things equal. C. the revenue from sales decreases, other things equal. D. the revenue from one more unit produced falls, other things equal.