Models must
A. be totally realistic in every detail.
B. be able to yield useable predictions.
C. include every relationship that exists.
D. be a complete reproduction of the real world.
Answer: B
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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.
In general, pollution exists in situations in which
A) people are selfish. B) people refuse to take social responsibility seriously. C) there are poorly defined private property rights. D) there exists public property.
Suppose that Family A borrows money when its car breaks down and saves money when the wife receives a holiday bonus from her employer. Suppose that Family B borrows money to buy elaborate birthday presents for the children and spends the husband's holiday bonus on a vacation to Florida. Which of the following is correct?
a. Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on transitory income. b. Family A's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. Family B's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. c. Family A's spending habits suggest that it bases its purchasing decisions on permanent income rather than transitory income. Family B's spending habits suggest that it bases its purchasing decisions on transitory income rather than permanent income. d. Both Family A's and Family B's spending habits suggest that they base their purchasing decisions on permanent income.
Which of the following industries is least likely to exhibit the characteristic of free entry?
a. bookstores b. hairstyling salons c. yoga studios d. satellite radio