A model
A. is a complete representation of some phenomenon.
C. is always expressed mathematically.
D. cannot be qualitative in nature.
B. is a simplified representation of some phenomenon.
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Suppose that you took out a $1000 loan in January and had to pay $75 in annual interest. During the year, inflation was 6 percent. Which of the following statements is CORRECT?
A) The nominal interest rate is 7.5 percent and the real interest rate is 1.5 percent. B) The nominal interest rate is 7.5 percent and the real interest rate is 13.5 percent. C) The real interest rate is 7.5 percent and the nominal interest rate is 1.5 percent. D) The real interest rate is 6 percent and the nominal interest rate is 7.5 percent.
In the United States, the Great Depression peaked in:
a. 1900 b. 1933 c. 1945 d. 1981
The opportunity costs of production in two countries engaged in trade
a. determine which country has an absolute advantage b. influence their domestic inflation rates c. lead to a higher level of economic efficiency d. create shifts of the production possibilities frontiers (PPF's) of both nations e. define the limits of the terms of trade
Which of the following actions might we logically expect to result from rising stock prices?
a. Jim decreases his consumption spending. b. Firms sell fewer shares of new stock. c. Firms spend more on investment. d. None of the above is correct.