Economic models
A) are used to explain how people think.
B) are used to explain how people behave.
C) are essential representations of the real world.
D) are used to explore the thought processes of individuals or groups.
Answer: B
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When a nation imports a good, its ________ surplus decreases and its ________ surplus increases
A) consumer; producer B) consumer; consumer C) producer; producer D) producer; consumer E) total; consumer
If the nominal interest rate is 2.5 percent and the inflation rate is 2 percent, what is the real interest rate?
a. .5 percent b. 1.25 percent c. 4.5 percent d. None of the above is correct.
The quantity theory of money and prices asserts that
A. increases in the money supply lead to a decrease in the velocity of money. B. increases in the money supply lead to an increase in the velocity of money. C. increases in the money supply lead to inflation. D. increases in the money supply will increase real GDP.
Based on new trade theory, as the size of markets increases, companies may be able to attain better ______.
Fill in the blank(s) with the appropriate word(s).