What is the best definition for rules of thumb?
a. universal principles that apply to economic situations across time and culture
b. limitations placed on the ability of humans to problem solve effectively
c. decision-making shortcuts based on what seems to have worked well in the past
d. ways of circumventing traditional economic principles in order to maximize utility
c. decision-making shortcuts based on what seems to have worked well in the past
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The equation of exchange can be written as
A) MsV = PY. B) MsP = VY. C) MsY = VP. D) None of the above are correct.
Technological progress increases the efficiency of mass producing HDTV-capable television sets. At the same time, more cable and television networks begin broadcasting in HDTV format, increasing the appeal of HDTV-capable television sets. On the basis of this information, what can be said about conditions in the HDTV market? a. The equilibrium quantity and price of HDTV-capable sets will
increase. b. The equilibrium quantity of HDTV-capable sets will increase and price will decrease. c. The equilibrium quantity of HDTV-capable sets will increase and what happens to price is indeterminate. d. The equilibrium quantity of HDTV-capable sets will decrease and price will increase.
If autonomous consumption decreases, which of the following combinations of events would be most likely to occur?
a. An upward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a leftward shift of the aggregate demand curve b. A downward shift of the aggregate expenditure line, a leftward shift of the money demand curve, and a leftward shift of the aggregate demand curve c. A downward shift of the aggregate expenditure line, a leftward shift of the money demand curve, and a rightward shift of the aggregate demand curve d. A downward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve e. An upward shift of the aggregate expenditure line, a rightward shift of the money demand curve, and a rightward shift of the aggregate demand curve.
If wages decrease and workers choose to work more hours or more shifts, their behavior is evidence of
a. the substitution effect. b. the income effect. c. rational expectations. d. rational ignorance.