Explain two reasons why economic forecasting can only be of limited use
One reason is that changes in market conditions will primarily reflect events that cannot be foreseen, such as new technology, abnormal weather, or political upheaval. A second reason is that decision makers will often make different choices in the future because of what they learned from the past; people learn from experience, so expectations formed in the future will be formed differently from those formed today.
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The exchange rate is the price at which the ________ of one country exchanges for the ________ of another country
A) currency; goods B) goods; goods C) currency; currency D) currency; financial instruments
A firm will break even when
A) P > ATC. B) P = ATC. C) P = AVC. D) P < AVC.
In order to simplify a complex situation, economic models often treat constraints as unalterable
Indicate whether the statement is true or false
Suppose that the United States imposes an antidumping duty on imported steel. Which of the following is likely to occur?
a. The U.S. terms of trade will improve, and U.S. steel imports will rise. b. The U.S. price of steel will rise, and U.S. steel consumption will fall. c. The foreign price of steel will rise, and foreign steel consumption will fall. d. U.S. steel companies will earn lower profits.