Which is not a characteristic of a good economic model?
A. Focuses on important details
B. Predicts cause and effect
C. Utilizes vague assumptions
D. Describes the world accurately
C. Utilizes vague assumptions
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By the 21st century few people purchased printed encyclopedias. Which of the following competitive forces best explains this?
A) competition from substitutes B) the bargaining power of suppliers C) the bargaining power of buyers D) the threat from potential entrants
If the Fed announces a new policy of slower monetary growth it will result in lower inflation and no change in output only if
A) the policy is credible and price expectations are reduced. B) the policy is time consistent and expectations remain constant. C) the policy is time inconsistent and expectations increase. D) Both A and B are correct.
Which of the following did not happen during the onset of the Great Depression?
a. The money supply fell as households took money out of bank deposits. b. The Fed conducted expansionary monetary policy. c. Stock prices fell about 90 percent. d. Disruption of the banking system made it difficult for some firms to obtain funds for investment.
Recall the Application about the decrease in price of illegal drugs in the United States to answer the following question(s).Recall the Application. The decrease in price of illegal drugs could be caused by either a(n) ________ in demand or a(n) ________ in supply of the drugs.
A. increase; increase B. increase; decrease C. decrease; increase D. decrease; decrease