Investing in risky assets in the hope of earning profits is called speculation
a. True
b. False
Indicate whether the statement is true or false
True
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The relationship between consumer spending and income is known as the
A) rate of individual wealth. B) consumption function. C) rate of income. D) inflation rate.
Entry of new firms causes
A) accounting profits to go to zero. B) market share to grown. C) economic profits to go to zero. D) total revenue to be maximized.
Economists consider tariffs to be
a. necessary for the protection of domestic industries and the achievement of full employment. b. harmful to domestic consumers. c. obstacles that hinder voluntary exchange and gains from trade. d. both b and c above
Which of the following is NOT a major assumption of the classical model?
A. People are motivated by self-interest. B. People can be fooled by money illusion. C. Wages are flexible. D. Prices are flexible.