"Ceteris paribus" assumption means
A. relying on real-world data in evaluating the usefulness of a model.
B. analysis that is strictly limited to making purely positive statements.
C. that nothing else changes except the variables under consideration.
D. the role of rational self-interest in the economy.
Answer: C
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Assume the Nozick rules are being followed in the economy so that the distribution of income is fair. What must be true for this to create an efficient allocation of resources?
A) All people are earning equal incomes. B) There are no public goods, monopolies, high transactions costs, or external costs and benefits. C) The costs of administering redistribution equals the benefits the poor receive. D) The government must redistribute income in a fashion that minimizes the "big tradeoff." E) The government must allocate resources using a command mechanism.
In the simple model of multiple deposit creation in which banks do not hold excess reserves, the increase in checkable deposits equals the product of the change in reserves and the
A) reciprocal of the excess reserve ratio. B) simple deposit expansion multiplier. C) reciprocal of the simple deposit multiplier. D) discount rate.
Some economists argue that the minimum wage:
A. drives some labor to occur "under the table." B. causes some employers to hire undocumented migrants driving up wages overall. C. leads some employers to pay workers cash and then report these payments to the government. D. All of these are true.