Economics is an empirical science, which means that economists
A) look at evidence to see whether or not the model is applicable.
B) test their models by utilizing unknown variables.
C) do only laboratory experiments.
D) refuse to test their models since the usefulness of a model is determined by whether it is logical or not.
Answer: A
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If the government uses fiscal policy to close a recessionary gap, government
A) expenditure must be increased by more than the gap because of the government expenditure multiplier. B) taxes must be cut by more than the gap because of the tax multiplier. C) expenditure can be increased by less than the gap because of the government expenditure multiplier. D) taxes can be raised by less than the gap because of the tax multiplier. E) taxes must be raised by more than the gap because of the tax multiplier.
According to the book, the most likely time for women's friendships to fall off is between the ages of:
a. 15-20 b. 25-40 c. 45-50 d. 51-60
Which of the following is correct regarding an unregulated natural monopoly?
a. An unregulated natural monopoly will set output where the average cost curve intersects demand, and will set price equal to average cost. b. An unregulated natural monopoly will set output where the marginal cost curve intersects demand, and will set price equal to marginal cost. c. An unregulated natural monopoly will set output where the marginal revenue curve intersects the marginal cost curve, and will set price at the demand curve. d. An unregulated natural monopoly will set output where the average cost curve intersects marginal revenue curve, and will set price at the demand curve.
A depreciation of one's currency means that:
a. the country's exports will become more expensive. b. it now requires less of this currency in exchange for one unit of another currency. c. the country's imports will become less expensive. d. it now requires more of this currency in exchange for one unit of another currency. e. it now requires more units of other currencies in exchange for one unit of this currency.