To be valid, an economic model must:
a. include every activity which occurs in the real world.
b. include at least 85 percent of the activity which occurs in the real world.
c. be able to predict events occurring in the real world.
d. exclude any link to the real world.
e. not be based on an abstraction of the real world.
c
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A decrease in the liquidity of corporate bonds will ________ the yield of corporate bonds and ________ the yield of Treasury bonds, everything else held constant
A) increase; increase B) decrease; decrease C) increase; decrease D) decrease; increase
In the early 1970s, the U.S. ran large balance of payments ________, causing an ________ dollar and an ________ German mark
A) deficits; undervalued; overvalued B) deficits; overvalued; undervalued C) surpluses; undervalued; overvalued D) surpluses; overvalued; undervalued
If the Fed wants to permanently lower interest rates, then it should raise the rate of money growth if
A) there is fast adjustment of expected inflation. B) there is slow adjustment of expected inflation. C) the liquidity effect is smaller than the expected inflation effect. D) the liquidity effect is larger than the other effects.
The supply chain refers to
A) the supply curve. B) the process of outsourcing. C) the process of downsizing. D) the process of creating and selling a product.