Economics is an empirical science, which means that economists
A. do only laboratory experiments.
B. look at evidence to see whether or not the model is applicable.
C. test their models by utilizing unknown variables.
D. refuse to test their models since the usefulness of a model is determined by whether it is logical or not.
Answer: B
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One of the defining characteristics of a perfectly competitive market is what type of product ?
In the money market, an increase in money demand will:
A) result in a rightward shift in the money demand curve increasing interest rates. B) result in a rightward shift in the money demand curve decreasing interest rates. C) result in a leftward shift in the money demand curve increasing interest rates. D) result in a leftward shift in the money demand curve decreasing interest rates.
An example of a direct regressive tax would be the _____ tax.
Fill in the blank(s) with the appropriate word(s).
Suppose the current one-year interest rate is 4%, and financial markets expect the one-year interest rate next year to be 8%. Given this information, the yield to maturity on a two-year bond will be approximately
A) 4%. B) 6%. C) 8%. D) 12%. E) none of the above