Economic models do not reflect the full complexity of reality and instead are based on:
A. the fallacy of composition.
B. value judgments.
C. purposeful simplifications.
D. trade-offs.
Answer: C
You might also like to view...
"When the Fed makes an open market purchase of government securities, the quantity of money will eventually decrease by a fraction of the initial change in the monetary base." Is the previous statement correct or incorrect? Explain your answer
What will be an ideal response?
Begin with the formula showing how households can divide their income. Then use this formula and the expenditure approach to GDP to show how investment is financed from three sources
What will be an ideal response?
Which one of the following variables is classified as a leakage in the output-income-spending flow model presented in the text?
Select one: a. Household saving b. Household Consumption c. Income d. Business Investment
The benefits-received principle of taxation is most evident in:
A. progressive tax rates. B. excise taxes on gasoline. C. the personal income tax. D. the corporate income tax.