The assumption that nothing changes EXCEPT the variables being studied is
A) the ceteris paribus assumption.
B) the rationality assumption.
C) positive economic analysis.
D) normative economic analysis.
Answer: A
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Excessive volatility refers to the fact that
A) stock returns display mean reversion. B) stock prices can be slow to react to new information. C) stock price tend to rise in the month of January. D) stock prices fluctuate more than is justified by dividend fluctuations.
Advocates of a gold standard believe that long-term price stability would be more likely under a gold standard than under current Fed monetary policy
Indicate whether the statement is true or false
A budget will
A) improve your credit standing so you can use borrowing to increase your current consumption. B) All of the above. C) help you focus on those expenditures that you value highly relative to cost. D) make it more attractive for you to buy a car every couple of years.
Refer to Figure 20.2. Suppose the areas 0P1AB and 0P2CD are equal. We can conclude that the price elasticity of demand between point A and point C is
A. Inelastic. B. Unitary elastic. C. Elastic. D. Impossible to determine. It depends on whether the price has increased or decreased.