Which of the following is NOT among the statements that critics of prospect theory have made about it?
A. It is not necessary, since expected utility theory accounts rather well for most risky choices.
B. The evidence reflects systematic mistakes that consumers might correct through experience and awareness.
C. Instead of explaining behavioral puzzles, prospect theory merely summarizes them.
D. Loss aversion has been proven to be false in many theoretical and experimental economic works.
D. Loss aversion has been proven to be false in many theoretical and experimental economic works.
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Suppose that many people who earn a living designing apps decide they can make more money selling honey and switch occupations. How will this change affect the number of apps supplied by producers?
A. supply decreases B. supply does not change C. supply increases
The ________ is the most popular dominant currency that countries fix their currency against
A) Swiss franc B) U.S. Dollar C) SDR D) Euro
John Maynard Keynes disagreed with the classical economists because he believed that
A) wages and prices adjust slowly. B) international trade plays a major role in the macroeconomy. C) government intervention in the economy cannot reduce business cycles. D) unemployment will be eliminated quickly by the invisible hand of the market.
Suppose that the MPC out of disposable income was 0.8 and the marginal tax rate was 0.25 for a given economy. In this case, the value of the tax multiplier in the simple Keynesian model would be
a. 1. b. -2. c. 2.5. d. 2. e. none of the above.