During one winter quarter at Frozen U., snow falls every Friday night. Students assume that, on their campus, Fridays cause snow. This hypothesis
a. should more properly be considered a theory.
b. assumes that correlation implies causation.
c. assumes that causation implies correlation.
d. reflects the fallacy of composition.
b
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Suppose the economy is operating below its full employment level. The Fed
A) can move the economy toward the full employment level by expanding the money supply to increase aggregate supply. B) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand through both its direct and its indirect effects. C) can move the economy toward the full employment level by expanding the money supply to increase aggregate demand and to hold prices constant. D) is powerless to affect either aggregate demand or aggregate supply. Fiscal policy is needed.
How are the cross elasticity of demand and income elasticity of demand similar and how are they different from the price elasticity of demand?
What will be an ideal response?
Two of the three largest banks in the world are located in
A. the United States. B. Japan. C. Germany. D. the United Kingdom.
Banks hold people's cash for free, and sometimes even pay for the privilege of holding it, because:
A. the cash can be deposited at the Federal Reserve Bank to earn interest. B. the Federal Reserve requires that they do so. C. deposits allow banks to make profitable loans. D. they are nice.