By invoking the assumption of ceteris paribus, economists
A. consider the impact of all relevant factors.
B. hold all variables constant when analyzing a model.
C. exclude irrelevant detail when analyzing a model.
D. isolate the impact of one single variable while holding all other variables constant.
Answer: D
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A rise in the price level changes aggregate demand because
A) firms increase their investment when prices are higher. B) the real value of people's wealth varies directly with the price level and so does their spending. C) the real value of people's wealth decreases and so they decrease their consumption. D) the more money people have, the more it is worth and hence the more goods and services they demand.
Figure 10-7
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In Figure 10-7, output at which point represents short-run but not long-run equilibrium?
A. A only B. B only C. Both A and B D. Both B and C
Reduced U.S. tastes for European goods would ____ the supply of euros and ____ the demand for euros. a. decrease; increase
b. not change; increase. c. increase; increase. d. not change; decrease.
The richest 5 percent of the U.S. population holds approximately ______ percent of total U.S. personal savings
a. 10 percent b. 95 percent c. 30 percent d. 50 percent e. 75 percent