To test their theories, economists usually have to
A) set up careful laboratory experiments with all variables controlled.
B) first examine theory and compare it with what happened in the past in the real world.
C) use only models that have a proven record of success.
D) conduct experiments that involve people who do not behave rationally.
Answer: B
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A large and growing current account deficit can be an indicator of a potential crisis
Indicate whether the statement is true or false
As the proportion of labor contracts that index wages to prices declines, we would expect that
A) a reduction in the unemployment rate will now have a smaller effect on inflation. B) the natural rate of unemployment will increase. C) the natural rate of unemployment will decrease. D) nominal wages will become more sensitive to changes in unemployment.
A monopolistic competitor in long-run equilibrium is like a perfect competitor in that
A. price equals marginal cost. B. zero economic profits are made. C. both produce at the minimum points of their average total cost curves. D. price is greater than marginal cost.
Which of the following goods is both nonrival and nonexcludable?
a. A tuna in the ocean b. The light from a lighthouse at a harbor entrance c. A soccer match in a stadium d. A hot dog at a hot dog stand