Why are math and graphics used in economic models?
Math and graphics used in economic models help us better understand the logic of rational choice, and they can often help us to avoid some mistakes of purely verbal reasoning. They can also suggest hypotheses to test against the data.
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Which of the following statements is the MOST accurate? In general, under the monetary approach to the exchange rate
A) the interest rate is not independent of the money supply growth rate in the short run. B) the interest rate is independent of the money supply growth rate in the long run. C) the interest rate is not independent of the money supply growth rate in the long run, but independent in the short run. D) the interest rate is not independent of the money supply growth rate in the long run. E) the interest rate is a factor of the money supply growth rate only in the short term.
As the price paid to a resource increases,
a. the supply of that resource will increase in the resource market. b. the supply of that resource will decrease in the resource market. c. resources will shift from other resource markets to this one. d. resources will shift from this resource market to others. e. resource usage will be unaffected.
As Javier hit a baseball with his bat, the bat cracked. This example shows ______.
a. composition, but not causation b. causation, but not correlation c. correlation and composition d. correlation and causation
Bank A had a reputation for asking few questions when it provided loans. Two years later, the majority of the loans were not repaid. This is because the bank had failed to address the
A. free-rider problem. B. moral hazard problem. C. contrary selection problem. D. adverse selection problem.