What distinguishes economists from other scientists?
A. Economists see the world through a lens of incentives; other scientists focus on other aspects of the world.
B. Economists focus more on policy issues compared with other scientists.
C. Economists use models; other scientists build scaled-down replicas of what they are studying.
D. Economists use regression models; other scientists use only correlations among variables.
Answer: A
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Suppose one knows two facts: first, the market for prescription drugs experiences chronic shortages and second, the government sets the price for prescription drugs. One can conclude that the government has:
A. encouraged buyers to hoard prescription drugs. B. set the price too high. C. set the price above the equilibrium price. D. set the price below the equilibrium price.
Suppose that the price of flour used to produce bagels increases. Hence the equilibrium price of a bagel ________, and the equilibrium quantity ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases E) does not change; does not change
The amount of unemployment caused by efficiency wages:
A. is larger in sectors that have more less-skilled workers in them. B. has been measured by economists to be minimal. C. has been found to be quite large in markets that have mostly minimum-wage workers. D. has little conclusive evidence in economic research.
Which of the following is a Fed tool?
A. Federal funds rate B. Stock prices C. Discount rate D. Interest rate spreads