Which of the following statements is true?
A) Models help economists to explain the past, but do not help in predicting the future.
B) The scientific method used by economists is based on idealism and not empiricism.
C) Testing with data enables economists to distinguish between good models and bad models.
D) Models that economists use are perfect replicas of reality.
C
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Which of the following has a tendency to raise the unemployment rate?
A) reducing unemployment insurance in an economy B) offering wages at the market-clearing rate C) implementing a minimum wage in an economy D) reducing labor union membership in an economy
A $1 increase in high-powered money raises the quantity of deposits until
A) all of that increase in high-powered money is held as required reserves. B) required reserves fall back down to zero. C) required reserves rise back up to zero. D) deposits rise by $1. E) GDP rises by $1 times the income-determination multiplier.
An individual who is only willing to pay a relatively low amount for a particular good
A) would fall in the upper portion of the demand curve. B) would fall in the middle portion of the demand curve. C) would fall in the lower portion of the demand curve. D) would not be considered part of the demand curve.
A company has an investment project that will cost $2 million today and yield a payoff of $3 million in 5 years. If the interest rate is 9%, should the firm undertake the project? Show evidence to support your answer