A key assumption of most economic analysis is that people act rationally, meaning they respond to incentives.
Answer the following statement true (T) or false (F)
True
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In the expanded circular flow diagram, the rest of the world interacts directly with
A) product markets. B) factor markets. C) households. D) firms.
A friend claims that the United States is a net international debtor. The best way of testing this claim is to see whether
A) U.S. foreign liabilities exceeded U.S. foreign income. B) U.S. receipts from foreign assets exceeded U.S. payments to foreign owners of U.S. assets. C) U.S. official reserve assets were positive or negative. D) the United States ran a balance of payments surplus or deficit last year.
Which of the following will shift the consumption function upward?
a. A lower interest rate b. An increase in the interest rate c. An increase in disposable income d. A decrease in disposable income e. Expectations of lower prices in the future
An "unemployment spell" is a period during which:
A. an unemployed individual leaves the labor force and then returns. B. the unemployment rate exceeds 15 percent. C. an individual is continuously unemployed. D. the unemployment rate is less than 10 percent.