Answer the following statements true (T) or false (F)
1. All goods and services produced during the year are added to the total wealth of the nation.
2. Stocks and bonds are counted as part of total wealth.
3. To understand the purpose of a given economic policy, it is necessary to understand the influence of political and social policies.
4. Economics is an isolated science since it has no relation to other sciences.
1. FALSE
2. FALSE
3. TRUE
4. FALSE
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A common approach that economists use to understand, explain and predict economic phenomena is to
A) form a theory or model. B) conduct experiments in a science lab. C) ask what people think. D) examine people's thought processes.
The reason that it is possible for the economy in the above figure to be at E2 rather than at E1 is that
A) in the long run there is always less than full employment. B) in the short run the economy can produce more than it can in a long-run full-adjustment situation. C) AD always shifts outward and never shifts inward. D) the economy must be in a recession.
Given the scenario described, if the market price of hammers increased from $8 to $11:
Assume there are three hardware stores, each willing to sell one standard model hammer in a given time period. House Depot can offer their hammer for a minimum of $7. Lace Hardware can offer the hammer for a minimum of $10. Bob's Hardware store can offer the hammer at a minimum price of $13. A. total producer surplus would increase to $5. B. total producer surplus would decrease to $1. C. total producer surplus would increase to $17. D. total producer surplus would decrease to $7.
Who do we not include in the “civilian labor force” for our unemployment calculation?