If a model's predictions are correct, then
A) its assumptions must have been correct.
B) it is proven to be correct.
C) Both A and B above.
D) None of the above.
D
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Which of the following describes a positive externality?
A) The government imposes a tax on cigarettes in order to discourage smoking among teenagers. B) People who do not attend college still benefit from others who receive a college education. C) John Henry paints the outside of his house in order to increase its market value just before he puts the house up for sale. D) Mary volunteers to drive her neighbor's children to soccer practice.
Financial capital is highly volatile, and technological advances have reinforced this volatility
Indicate whether the statement is true or false
When the interest rate is R, the formula for finding the value of a current amount $M one year from now is
A) M (1 + R/100). B) M (1 + R). C) M / (1 + R). D) M / R. E) M / (100R).
Deadweight loss:
A. creates efficiency in markets. B. is the difference between the total surplus occurring in a market and the maximum total surplus achievable. C. is the loss in producer surplus from a price increase D. always occurs in markets.