Which of the following is most likely to represent causality rather than association?
A. In years that fashion dictates wider lapels on men's jackets, the stock market grows by at least 5 percent.
B. Interest rates are higher in years ending with a 1 or a 6.
C. Unemployment falls when the AFC champion wins the Super Bowl.
D. Quantity demanded goes up when price falls because lower prices increase consumer purchasing power, ceteris paribus.
Answer: D
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Real income is redistributed from ________ in the case of ________ inflation
A) creditors to debtors, anticipated B) creditors to debtors, unanticipated C) debtors to creditors, anticipated D) debtors to creditors, unanticipated
Which of the following would cause the U.S. money supply to expand?
a. a commercial bank calling in a loan to build up more excess reserves b. a commercial bank purchasing U.S. securities from the Fed as an investment c. a decrease in reserve requirements d. an increase in the discount rate
An economic boom in the United States will tend to cause booms in other countries because as U.S. GDP rises, U.S.
A. tariffs will automatically fall. B. exports will rise. C. imports will rise. D. exports will fall.
In the medium run, a tax increase that causes a reduction in the budget deficit will
A) affect only the price level. B) not affect the price level but will alter the composition of output. C) not affect the level of output, but will affect the composition of output. D) affect both the level and composition of output.