Why is economics called an empirical science?
A. because economics uses math to evaluate the usefulness of its models
B. because economics has been used to both create and destroy empires
C. because economics utilizes only assumptions to evaluate how accurate a model is
D. because economics relies on real-world data to determine the usefulness of a model
Answer: D
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If demand falls, what happens to equilibrium price and quantity?
What will be an ideal response?
If a central bank were required to target inflation at zero, then when there was a negative aggregate supply shock the central bank
a. would have to increase the money supply. This would move unemployment closer to the natural rate. b. would have to increase the money supply. This would move unemployment further from the natural rate. c. would have to decrease the money supply. This would move unemployment closer to the natural rate. d. would have to decrease the money supply. This would move unemployment further from the natural rate.
Which of the following is an argument in support of market power?
A.) Marginal cost pricing. B.) Economies of scale. C.) Price fixing. D.) Predatory pricing.
An inferior good is
A. generally of low quality. B. purchased in the underground economy. C. is damaged or referred to as a "second". D. purchased in declining quantities as income rises.