An economic hypothesis:
A. has the same meaning as an economic principle or economic law.
B. is usually a normative statement.
C. is a possible explanation of cause and effect.
D. is a stronger generalization than an economic law.
Answer: C
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Refer to Table 5.1. Hector has a comparative advantage in the production of
A) bracelets. B) tiaras. C) both products. D) neither product.
As the reserve ratio increases, the money multiplier
A. increases. B. decreases. C. does not change. D. None of the above is correct..
If the Fed paid a higher interest rate to banks on their reserves at the Fed, excess reserves in the banking system would tend to fall
a. True b. False Indicate whether the statement is true or false
Governments have learned that a(n)
a. increased budget deficit tends to reduce interest rates and increase investment, thus increasing the growth of the capital stock b. reduced budget deficit tends to reduce interest rates and increase investment, thus increasing the growth of the capital stock c. reduced budget deficit tends to increase interest rates and increase investment, thus increasing the growth of the capital stock d. reduced budget deficit tends to increase interest rates and increase investment, thus reducing the growth of the capital stock e. increased budget deficit tends to increase interest rates and increase investment, thus reducing the growth of the capital stock