Which of the following is not true about economic? models?
A. A model is only an
approximation.
B. They can be highly complex and based on lengthy mathematical analysis.
C. They are not? useful, since they do not include all variables..
D. Models are not perfect replicas of reality.
C. They are not? useful, since they do not include all variables..
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Suppose the production of a good results in positive externalities. If output occurs at the intersection of the marginal social benefits curve and the supply curve, then
A. output will be at a higher level than if all benefits were not taken into account. B. output will be at a lower level than the socially optimal level. C. the marginal private benefit curve will lie above and to the right of the marginal social benefit curve. D. there will be underproduction. E. all of the above
Thrift institutions that specialize in mortgage investments and borrow short and lend long are risky
Indicate whether the statement is true or false
Which of the following would lead to an upward shift of the consumption-income line?
a. A decrease in income b. A decrease in population c. An increase in income d. An increase in wealth e. An increase in the interest rate
Which of the following is an examples of spending on factors of production in the circular flow model?