You are struggling to pick a major and find psychology and economics equally attractive but you cannot make up your mind. Then your parents suggest that, given your SAT scores you might want to consider mathematics. Before long you have no problem settling in on economics as your choice. This is an example of
A. bounded rationality.
B. anchoring and adjusting.
C. the halo effect.
D. availability.
Answer: C
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Starting from long-run equilibrium, an increase in autonomous consumption results in ________ output in the short run and ________ output in the long run.
A. higher; higher B. higher; potential C. lower; higher D. lower; potential
According to the theory of exchange-rate adjustments, a country with a current ________ is likely to experience a currency ________
A) deficit; depreciation B) surplus; depreciation C) deficit; appreciation D) surplus; devaluation
The _____ of an income tax comes from the _____ effect
a. excess burden; substitution b. excess burden; income c. excess benefits; substitution d. excess benefits; income
At equilibrium, price ________ is equal to _________.
Fill in the blank(s) with the appropriate word(s).