Economists use the ceteris paribus assumption to see how ______.
a. long variables can be kept constant
b. one variable influences another without interference from other variables
c. several variables interact similarly to a real-world setting
d. outside variables affect the two variable being studied
b. one variable influences another without interference from other variables
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The goal of a commercial bank is to
A) establish good regulations for commercial activities. B) accept only deposits made in money. C) minimize its taxes paid to state governments. D) maximize its stockholders' wealth. E) make only safe, no-risk loans.
Assume that at the current market price of $4 per unit of a good, you are willing and able to buy 20 units. Last year at a price of $4 per unit, you would have purchased 30 units. What is most likely to have happened over the last year?
a. Demand has increased b. Demand has decreased c. Supply has increased d. Supply has decreased e. Quantity supplied has decreased
Lately, the Chinese authorities seem to be backing away from ____ and the Yuan has ____ relative to the dollar
a. managed-float; devalued b. currency peg; depreciated c. floating rate; revalued d. currency peg; appreciated
Which of the following is NOT part of Keynes's criticism of the classical theory of employment?
A. A reduction in wage rates will lead only to a reduction in total spending, not to an increase in employment. B. Investment spending is not very strongly influenced by the rate of interest. C. Prices and wages are simply not flexible downward in modern capitalistic economies. D. Saving in modern economies depends largely upon the level of disposable income and is little influenced by the rate of interest.