Positive economic principles are those that:
A. are influenced by political ideology.
B. are always correct.
C. predict how people will behave.
D. indicate how people should behave.
Answer: C
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The "double coincidence of wants" is
A) what is needed to use money. B) eliminated with the use of money. C) money's role as a unit of account. D) how value is stored when we transact with money. E) eliminated when we barter instead of using money.
We see that the Netherlands, Belgium, and Ireland trade considerably more with the United States than with many other countries
A) This is explained by the gravity model, since these are all large countries. B) This is explained by the gravity model, since these are all small countries. C) This fails to be consistent with the gravity model, since these are small countries. D) This fails to be consistent with the gravity model, since these are large countries. E) This is explained by the gravity model, since they do not share borders.
An unanticipated decline in investment demand within the new classical model will cause
a. the price level to fall with no effect on output. b. output to fall with no effect on the price level. c. both the price level and output to fall. d. no change in either the level of price or output.
Any firm that has economies of scale will
A. Be able to produce at a lower unit cost as it increases production. B. Prefer to produce a small amount of total industry output. C. Face an upward-sloping long-run average total cost curve. D. Try to spread production over many plants.