Abstracting from reality is an important element of all economic models
a. True
b. False
Indicate whether the statement is true or false
True
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How can crime and punishment be modeled as a principal-agent problem? What does the model suggest about crime prevention?
What will be an ideal response?
Some economists argue that policymakers can use monetary and fiscal policy to reduce the severity of economic fluctuations. What are some things policymakers can do to boost the economy when aggregate demand is inadequate to ensure full employment?
Which of the following would not be included in aggregate demand?
a. an increase in firms' inventories. b. purchases of goods by households. c. firms' purchases of newly produced machinery. d. government's tax collections.
Which of the following is least likely to affect the supply of labor in any particular industry?
A. The size of the available working population B. The nonmonetary attractiveness of the job C. The amount of ability and training necessary to enter the job D. The wages offered in the industry