Economics is a social science rather than a “hard” science like physics because
A. economists abstract from reality when creating their theories.
B. economics is easier to study than physics.
C. economists must explain their theories to policy makers who lack formal mathematical training.
D. economists study human behavior, which is affected by an unpredictable and vast range of influences.
Answer: D
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When prices of new houses rise significantly faster than rent prices, this is evidence of a:
A) debt-deflation process B) bubble C) financial crisis D) sovereign debt crisis
Marginal utility diminishes more quickly:
a. the less durable the good is. b. the greater the number of consumers consuming the good. c. the shorter the time period between two successive consumptions. d. the greater the number of firms producing the good. e. the cheaper the good is.
Which of the following represents a stock's fundamental value?
A) the price the stock would sell at in the midst of a rational bubble B) the price the stock would sell at if the interest rate were zero C) the present value of its expected future dividend payments D) the simple sum of its future dividend payments E) none of the above
Assuming a market rate of interest equal to 7 percent and anticipated inflation is 2 percent, what is the real (adjusted for inflation) present value of $200 to be received one year from today?
A. $187 B. $210 C. $190 D. $214