A model or theory in economics is:
A) based mostly on value judgments.
B) built using relevant observations, assumptions, and abstractions.
C) only useful if it correctly portrays the real world and its complexities.
D) useful only if it is based on normative economic statements.
Ans: B) built using relevant observations, assumptions, and abstractions.
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If total Fed liabilities __________, then reserves have to __________, everything else being equal
A) fall; rise B) rise; rise C) fall; fall D) None of the above.
Some call the Great Recession the:
A. period when the economy does not grow for four consecutive quarters. B. recession that began in 2007 due to the decline in consumer spending when the housing bubble burst. C. period of high inflation that took place in the early 1970s. D. period of economic stagnation that took place in the early 1990s.
For most firms in the economy, the largest part of factor costs is the cost of
a. labor. b. capital. c. property and machinery. d. land and natural resources.
Which of the following is an example of the consequences that go well beyond commonly reported and narrowly defined "environmental" effects?
a. spread of pests b. polluted air c. extinct species d. damaged beaches