The value of a model is determined by
A. the usefulness of its predictions in the real world.
B. the realism of its assumptions.
C. the extent of the profit earned by applying it.
D. the model's attention to real world details.
Answer: A
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The demand for money that arises so that individuals or firms can make purchases on quick notice is called the
A) speculative demand for money. B) real demand for money. C) transaction demand for money. D) liquidity demand for money.
All of the following are reasons why the wages of workers and the prices of inputs rise more slowly than the prices of final goods and services except
A) contracts make prices and wages sticky. B) unions are successful in pushing up wages. C) menu costs make some prices sticky. D) firms are often slow to adjust wages.
Suppose there was a substantial increase in political instability in the rest of the world. What would be the effects on the U.S. current account? Explain
What will be an ideal response?
According to the text, today's Lorenz curve is
A) a straight line. B) a vertical line. C) more bowed than in 1929. D) less bowed than in 1929.