Economics is different from a "hard" science like physics because:
a. economists abstract from reality in 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 cannot easily control all the variables that might influence human behavior.
d
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In the figure above, the value on the x-axis increases as we move from
A) point G to point A. B) point C to point A. C) point F to point A. D) point E to point A.
The basic purpose of economic models is to
a. construct simplifying assumptions about the real world b. explain reality in all its complexity c. collect empirical data to support the facts d. construct situations where controlled experiments can be carried out e. provide explanations for, and predictions of, economic events
If the fluctuations in the economy's real growth rate from year to year are caused primarily by variations in the rate at which aggregate demand increases, then data would show the most rapid inflation occurs when
a. unemployment is the highest, and the lowest inflation occurs when unemployment is the lowest. b. AS grows most rapidly, and the lowest inflation occurs when AS grows most slowly. c. AD rises most slowly, and the lowest inflation occurs when AD rises most rapidly. d. output grows most rapidly and the lowest inflation when output grows most slowly.
A regression model suffers from functional form misspecification if _____.
A. a key variable is binary. B. the dependent variable is binary. C. an interaction term is omitted. D. the coefficient of a key variable is zero.