An accounting identity
A) ensures that all balances will be in equilibrium.
B) is useless in analyzing balance of payments since one cannot tell from the identity whether an equilibrium exists or not.
C) ensures a balance but does not ensure an equilibrium.
D) applies only to plans of economic agents and not to their actual actions.
C
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A demand curve is a
A) graphical representation of the demand schedule. B) graphical representation of alternative demands. C) horizontal line connecting amounts demanded at various income levels. D) graphical relationship, that includes several things such as tastes, time, and supply.
Anthony Downs, in The Economic Theory of Democracy, argues that voters choose to remain "rationally ignorant" when they vote in elections, knowing relatively little about the candidates or the issues. What economic principle would you invoke to explain this behavior?
a. public good theory b. moral hazard c. the cost of information d. risk aversion
The crowding model of occupational discrimination suggests that occupational segregation results in:
A. A lower domestic output than would otherwise be the case B. Higher levels of total employment than would otherwise be the case C. Higher interest rates in the private sector than would otherwise be the case D. A higher rate of inflation than would otherwise be the case
The exchange rate is the
A) opportunity cost of pursuing a nation's comparative advantage. B) price of one country's currency expressed in terms of another country's currency. C) ratio between imports and exports. D) interest rate that is charged on risk-free international capital flow.