The assumption that individuals do NOT intentionally make decisions that would leave them worse off is referred to as
A) the premium assumption.
B) the law of comparative advantage.
C) the rationality assumption.
D) a ceteris paribus assumption.
Answer: C
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The basic formula for the price elasticity of demand is
A. absolute decline in price/absolute increase in quantity demanded. B. percentage change in price/percentage change in quantity demanded. C. absolute decline in quantity demanded/absolute increase in price. D. percentage change in quantity demanded/percentage change in price.
Capital gains are
A. treated exactly like other sources of income. B. taxed differently than other sources of income. C. generally not associated with a "lock-in effect." D. only realized at death.
In 1998 an economic and financial crisis in South Korea caused it to experience
A) a surplus in their balance of payments. B) a deficit in their balance of payments. C) a balanced balance of payments. D) an unbalanced balance of payments. E) a lull in international trade.
Why do banking panics normally lead to recessions?
What will be an ideal response?