Models are simplifications that are used to observe the workings of a system
a. True
b. False
Indicate whether the statement is true or false
True
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If nominal GDP increases this year, then real GDP
A) could either increase or not change but cannot decrease. B) must decrease. C) must increase. D) must not change. E) could increase, decrease, or not change.
We calculate the price elasticity of demand as the
A) ratio of the percentage change in the quantity demanded to the percentage change in price. B) change in quantity divided by the change in price. C) ratio of the percentage change in the price to the percentage change in quantity. D) percentage change in the quantity demanded divided by the percentage change in income. E) equilibrium quantity divided by the equilibrium price.
Economists tell stories
a. in order to breathe life into economic theory and personalize abstract ideas b. because economics is an art, not a science c. as a way of rigorously testing economic theory d. because doing so is a required part of the scientific method e. to show how their theory can predict at least one real-world situation
Suppose the U.S. government institutes a "Buy American" campaign, in order to encourage spending on domestic goods. What effect will this have on the U.S. trade balance?