Economists make assumptions in order to...
What will be an ideal response?
focus their thinking on the essence of the problem at hand
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In the foreign exchange market, a decrease in the exchange rate increases the quantity of dollars supplied
Indicate whether the statement is true or false
Which government program would be considered an "entitlement" program?
A) national defense B) subsidies for mass transportation C) law enforcement in major U.S. cities D) Social Security
When a firm hires labor up to the point where the wage is equal to the value of the marginal product of labor, it is
a. minimizing labor costs. b. guaranteeing that labor costs do not exceed fixed costs. c. maximizing the number of workers it can hire and still experience a positive profit. d. maximizing profit.
In the short run, an expanded money supply leads to:
a. a higher nominal interest rate. b. no change in the nominal interest rate. c. a lower nominal interest rate. d. an increase in the exchange rate.