Two economists are arguing about how to approach a problem. The first economist says, "Look, I can see in the data that consumption rises when income rises. We need to build a model with an equation that relates the two." The second economist responds, "I can see that is the case, but we have to understand why that is true before we build any equations, and then we will see what the model says about the relationship between the two." What kind of economist is the second one likely to be?
A. An engineering economist
B. A behavioral economist
C. A traditional economist
D. An irrational economist
Answer: C
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Last week, 13 Mexican pesos could purchase one U.S. dollar. This week, it takes 11 Mexican pesos to purchase one U.S. dollar. This change in the value of the dollar will ________ exports from the United States to Mexico and ________ U.S
aggregate demand. A) decrease; increase B) increase; increase C) decrease; decrease D) increase; decrease
Explicit provisions in a loan agreement that prohibit the borrower from engaging in certain activities is called:
A) credit rationing B) restrictive covenants C) credit-risk analysis D) adverse selection
A primary determinant of market structure is the number of producers in a market
Indicate whether the statement is true or false
What is a method sellers use to combat imperfect information?
a. money back guarantees b. more advertising c. lowering the price d. more directions included with a purchase