Economists make simplifying assumptions to
A) understand extremely complex phenomenon.
B) build a model that is as close to the real world as possible.
C) focus on the variables that are important to an economic theory.
D) A and C
D
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Environmental economics
a. is concerned mainly with the residual flow from economic activity back to nature b. focuses on the flow of resources from nature to economic activity c. recognizes that the flow of residuals back to nature is preventable d. none of the above
The price that a person must pay in order acquire purchasing power now rather than in the future is called
a. the interest rate. b. the foreign exchange rate. c. the inflationary premium. d. the risk premium.
Which of the following is an automatic stabilizer?
What will be an ideal response?
Because it costs more to live in cities than it does to live in rural areas, the
A. true poverty rate is higher than the government reports it to be. B. poverty line is set too high in cities and too low in rural areas. C. poverty rate is overstated in cities and understated in rural areas. D. poverty line is set too low in cities and too high in rural areas.