Behavioral economics deals with
A) the assumption that people are always selfish.
B) bounded rationality.
C) unbounded willpower.
D) only theories without justification from empirical evidence.
B
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Real GDP equals $12 trillion and aggregate hours equals 300 billion hours. What does labor productivity equal?
What will be an ideal response?
If interest rates rise, then velocity should ____ in the Keynesian model and _____ in the Monetarist model
a. rise; fall. b. stay the same, stay the same. c. rise, stay the same. d. fall; rise. e. none of the above
The primary effect of rent control in the short run is to reduce rents
a. True b. False Indicate whether the statement is true or false
Hollywoodland, being self-sufficient in most products, trades only two goods with the Rest of the World (ROW), movies and automobiles. Both of these goods are produced using skilled labor (L) and capital (K) with the returns to capital being the interest rate (r) and the returns to skilled labor being the wage rate (w). The production of automobiles is capital intensive relative to the production of movies, and Hollywoodland is skilled-labor abundant relative to the ROW.a. State the Heckscher-Ohlin theorem and use it to predict the pattern of trade between Hollywoodland and the ROW.b. If the price of Hollywoodland's imports rises, while the price of its exports remain unchanged, what would happen to the factor returns in Hollywoodland in the long run? State the theorem used to explain
the answer, and briefly state the intuition behind the theorem. What will be an ideal response?