Scientists studying human behavior have found that people tend to:
A. Always make rational decisions
B. Make systematic errors in their decisions
C. Make only random errors in their decisions
D. Always make decisions that are not rational
B. Make systematic errors in their decisions
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Which of the following is an example of moral hazard?
A) I hire you to work in my garden for a fixed fee, and you work hard all day. B) I hire you to work at an hourly rate and you work as slowly as possible. C) You apply for the job only because I pay a fixed wage per day, no matter how much or little you do. D) You agree to be paid by the weed to work in my garden, and then don't work hard.
In economic models of the public sector, the median voter model presents an extreme view of the way that the public sector allocates resources
a. True b. False
If you were a Keynesian, you would
a. accept the countercyclical policy of doing nothing, that is, allow market forces to work b. believe that the level of aggregate demand in the 1930s was sufficient to generate full employment c. accept the fact that policymakers should eliminate inflation first before focusing on unemployment d. focus on increasing aggregate demand in order to stimulate the economy e. argue in favor of supply side economics
Which of the following can reduce the level of economic growth?
A. Crowding out. B. Technological improvements. C. Higher ratios of capital to labor. D. Crowding in.