Economists assume that rational behavior is useful in explaining choices people make
A) because irrational people do not make economic choices.
B) because individuals act rationally all the time in all circumstances.
C) even though people rarely, if ever, behave in a rational manner.
D) even though people may not behave rationally all the time.
D
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Looking at the average tariff rate in the United States since 1930, we see that
A) tariffs have trended downward for most of the period. B) tariffs were made illegal in the United States in 1955. C) tariff levels have remained high, at over 50 percent throughout the period. D) while we talk about free trade, tariff levels have risen over the last 30 years. E) at first tariffs declined, but have recently risen.
If aggregate expenditure was less than GDP, which of the following would happen?
a. Inventories would shrink and GDP would drop in future periods. b. Inventories would grow and GDP would drop in future periods. c. Inventories would shrink and GDP would increase in future periods. d. Inventories would grow and GDP would increase in future periods. e. Inventories would not change and GDP would drop in future periods.
Which of the following is an accurate statement about the aggregate supply curve?
A. The consensus view is that it begins as horizontal, then starts to slope upward to the right as the economy approaches full employment, and eventually becomes vertical beyond full employment. B. Keynesians view it as vertical up until full employment, at which point it becomes horizontal. C. Monetarists view it as horizontal. D. The Keynesian view is that it is vertical.
If prices are not stable:
A. money performs better as a unit of account. B. prices become highly useful for conveying information. C. money becomes less useful as a store of value. D. it may be an inconvenience, but resources are still allocated efficiently.