One thing economists do to help them understand how the real world works is
a. make assumptions.
b. ignore the past.
c. try to capture every aspect of the real world in the models they construct.
d. All of the above are correct.
a
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Refer to Table 2-2. Assume Nadia's Neckware only produces ascots and bowties. A combination of 16 ascots and 6 bowties would appear
A) along Nadia's production possibilities frontier. B) inside Nadia's production possibilities frontier. C) outside Nadia's production possibilities frontier. D) at the horizontal intercept of Nadia's production possibilities frontier.
Commercial banks
A) buy private placements for their own portfolio of assets. B) help firms sell private placements. C) sell their own private placements. D) have nothing to do with private placements.
Monetarists have trouble accepting the Keynesian view on money and the effect of money on the economy. Monetarists, unlike Keynesians, believe that
a. there is a strong cause-and-effect relationship between the money supply and real GDP, increase one and the other increases as well b. there is a strong cause-and-effect relationship between changing expectations and the velocity of money c. the economy is typically at full employment so that any increase in the money supply will only result in inflation d. the cause-and-effect relationship between the money supply and money demand is mutually interdependent, that is, any increase in supply increases demand and anyincrease in demand increases supply so that the economy is typically in equilibrium e. there is a strong cause-and-effect relationship between the interest rate and the price level that works as follows: increase the interest rate and real GDP increases whichdecreases the price level
An economic explanation for why rock concert tickets sell at prices below the market equilibrium is that musicians
a. are not greedy. b. want to reward their loyal fans. c. expect that younger people, who will spend more on merchandise at the concert, are more willing to wait in long lines to buy tickets than adults. d. expect that those who are more willing to wait in long lines to buy tickets will make a more receptive audience than those who are willing to pay a higher price.