How is economic research similar to the research in other branches of science?
Economists use the same principles that guide the research in other branches of science like physics and chemistry. Economists combine their factual knowledge, data, and logic to build models and derive hypotheses from them that can be tested against reality.
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Refer to the figure above. If the exchange rate is fixed below E yuan per dollar:
A) the dollar is overvalued and the yuan is undervalued. B) both the yuan and dollar are undervalued. C) the dollar is undervalued and the yuan is overvalued. D) both the yuan and dollar are overvalued.
Econometrics is the statistical analysis of economic data.
A. True B. False C. Uncertain
If a country has the ability to produce a specific good with fewer resources than other countries, then it has:
A. A comparative advantage. B. A trade surplus. C. Favorable terms of trade. D. An absolute advantage.
In the given figure, the economy is initially in long-run equilibrium at point A. If there is an adverse supply shock that reduces potential output and shifts the long-run aggregate supply curve from LRAS to LRAS', then the new long-run equilibrium is reached at point:
A. B. B. C. C. D. D. E.