Which statement is consistent with the economic way of thinking?
A) Politicians seek to advance their own interests.
B) Politicians are not only concerned with money and material goods.
C) Politicians do not necessarily pursue narrow or selfish goals.
D) All of the above.
E) None of the above.
D
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The long-run adjustment to a negative supply shock results in
A) the price level rising. B) the short-run aggregate supply curve shifting to the right. C) workers being willing to accept higher wages. D) unemployment rising.
How can the Gordon Growth model help explain the major decline in stock indexes during 2007-2009?
A) There was an increase in the required return on equities and a decrease in the expected growth rate of dividends. B) There was a decrease in the required return on equities and an increase in the expected growth rate of dividends. C) There was an increase in the required return on equities and an increase in the expected growth rate of dividends. D) There was a decrease in the required return on equities and a decrease in the expected growth rate of dividends.
Which of the following is a TRUE statement about the economic assumption of rationality?
A) Individuals who are rational necessarily ignore the interests of others. B) Individuals generally act as though they are rational. C) Individual behavior may be irrational but group behavior is always rational. D) People make decisions as if they are omniscient.
The long run average cost curve
A) Reflects increasing, constant and decreasing returns to labor. B) Is an envelope of a series of short run average cost curves. C) Is an envelope of a series of marginal cost curves. D) None of the above