The distribution of income is not a zero-sum game
Indicate whether the statement is true or false
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Suppose prices are quoted in dollars and transactions are conducted in pesos. The dollar serves as a
A) medium of exchange. B) store of value. C) unit of account. D) all of the above.
A tax where the percentage of income paid in taxes is the same regardless of the size of the income is a:
a. proportional tax. b. regressive tax. c. progressive tax. d. mix of a and b.
In the 48-year period of 1960 to 2008 , the approximate shares of U.S. GDP are
a. consumption 15 percent; investment 65 percent; government 20 percent; net exports zero b. consumption 20 percent; investment 65 percent; government zero; net exports 15 percent c. consumption 65 percent; investment 15 percent; government 20 percent; net exports zero d. consumption 65 percent; investment zero; government 20 percent; net exports 15 percent e. consumption 15 percent; investment 20 percent; government 65 percent; net exports zero
Consider the following:
(i) A psychologist argues, "Economists assume that people behave rationally. However, people can and often do behave irrationally. I really think economists need to consider irrational behavior if their results are going to be valid." How should the economist respond? (ii) A mathematician argues, "Economists assume that people optimize. Yet most people are incapable of doing the complex mathematics that are a matter of course in economic models. Doesn't this reduce the usefulness of economic models?" Respond to the mathematician.