What is the economic way of thinking, and why is it important?
What will be an ideal response?
The economic way of thinking provides a framework for analyzing solutions to economic problems. Since economic problems confront all of us much of the time, knowledge of economics will enable one to arrive at better decisions, and enable one to evaluate many public policy questions in a systematic manner.
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Refer to Figure 23-1. At point L in the figure above, which of the following is true?
A) Actual inventories are greater than planned inventories. B) The economy has achieved macroeconomic equilibrium. C) Aggregate expenditure is greater than GDP. D) GDP will be increasing.
When a firm is experiencing economies of scale, the minimum point of the firm's short-run average total cost curve shifts down as it expands its scale of production
Indicate whether the statement is true or false
Which of the following is the best example of a normative question?
A. Will increasing the money supply affect interest rates? B. How does the market for corn work? C. Will the redistribution of income make society better off? D. How do prices affect the market for coffee?
Phillips's research looked at British data on
A. inflation and nominal wage growth. B. unemployment and nominal wage growth. C. unemployment and output. D. unemployment and inflation.