An economist at the University of Alaska at Anchorage has been asked to explain why the price of Alaskan crude oil has fallen recently. In order to develop a model, the professor should take which steps?
a. Identify the problem, develop a model based on simplifying assumptions and test the model to formulate a conclusion.
b. Gather data on crude oil prices and seemingly unrelated variables in order to look for associations, then formulate a hypothesis based on those unexpected associations.
c. Ask people in Alaska why they are not purchasing oil.
d. None of these. The oil industry is controlled by a cartel; therefore price changes in the industry cannot be explained using economic theories.
a
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In the figure below, the value of insurance is $7,000.
A. True
B. False
C. Uncertain
A positive nominal interest rate indicates
a. how fast the number of dollars in your savings account is rising over time. b. how fast the purchasing power of your savings account is rising over time. c. the number of dollars in your savings account today. d. the purchasing power in your savings account today.
Which of the following government actions is most likely to stimulate the economy:
A. Raising the prime interest rate B. Lowering tax rates C. Printing less money D. Borrowing more money
In a simple economy (no government or foreign trade), the vertical distance between the consumption function and the expenditure schedule measures
a) undesired investment b) undesired inventory depletion c) planned investment d) unintended investment