Economic analysis is a tool that
A) aids all decision making.
B) helps us understand why people make mistakes.
C) helps us forgive selfish people.
D) makes everyone rich.
A
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Suppose the real wage of a worker remains unchanged between Year 1 and Year 2 but the nominal wage decreases from $20 in Year 1 to $18 in Year 2 . This implies that the price level has: a. increased by 20 percent. b. increased by 25 percent. c. remained unchanged
d. fallen by 10 percent. e. fallen by 20 percent.
Suppose the central bank reduces the money supply. This monetary contraction will always cause a greater reduction in output when it is accompanied by
A) an increase in expected future taxes. B) an increase in expected future interest rates. C) a reduction in expected future output. D) all of the above E) none of the above
Which of the following is TRUE of the Fed's credit policy?
A) The Fed has implemented a credit policy since 1914. B) Today about 40 percent of the Fed's asset holdings are related to its conduct of credit policy. C) The Fed's credit policy is extended only to U.S. financial institutions. D) The Fed's objective for its credit policy is to reduce the federal funds rate.
When someone asks how much money you made this year, they are using the term "money" correctly
a. True b. False Indicate whether the statement is true or false