Economic models
a. are constructed to mirror reality as closely as possible, and in this respect economic models are no different from other scientific models.
b. are constructed to mirror reality as closely as possible, and in this respect economic models are very different from other scientific models.
c. are simplifications of reality, and in this respect economic models are no different from other scientific models.
d. are simplifications of reality, and in this respect economic models are very different from other scientific models.
c
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When economists assume that people are rational and respond to incentives, they mean
A) people act with kindness. B) people act in their own self-interest. C) people are altruistic. D) people are selfish.
Additions to inventory subtract from GDP, and when the goods in inventory are sold, the reductions in inventory add to GDP
a. True b. False Indicate whether the statement is true or false
In short-run equilibrium, the quantities supplied and demanded of Real GDP can be less than or greater than Natural Real GDP
Indicate whether the statement is true or false
Josh wants to go to the football game this weekend, but he has a paper due on Monday. It will take him the whole weekend to write the paper. Josh decides to stay home and work on the paper. According to the Scarcity Principle, the reason Josh doesn't go to the game is that:
A. going to the game won't be fun. B. Josh can't go the game and finish the paper. C. writing the paper is easier than going to the game. D. Josh prefers schoolwork to football games.