Describe in words the anatomy of an economic model
What will be an ideal response?
An economic model is comprised of a set of assumptions that lead to a set of implications. In an effective economic model, if one or more of the assumptions are changed, so too is the set of implications. In other words, any assumption that does not influence the implications is superfluous and can be dropped from the model. In an effective economic model, the implications are clearly stated and testable using real-world data.
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What effect would taxation have on real consumption spending when government spending is autonomous?
A) Taxation reduces real consumption spending. B) Taxation increases real consumption spending. C) Taxation causes both real consumption spending and planned real saving to increase. D) None of the above is correct.
The choice of a voter to remain uninformed because the marginal cost of obtaining information is greater than the marginal benefit from obtaining knowledge is called:
a. irrational ignorance. b. rational ignorance. c. collective interest. d. choice.
?Econlit is an online search service which allows users to do a comprehensive search of almost all economics journals.
Answer the following statement true (T) or false (F)
Figure 33-6
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The long-run Phillips curve in Figure 33-6 (b) would include which of the following points?
A. g, e, m B. g, e, r C. j, e, r D. j, e, m