In constructing models, economists
A) include all independent variables.
B) include all available information.
C) attempt to duplicate the real world.
D) make simplifying assumptions.
D
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In the aggregate demand-aggregate supply model in the short run, an increase in the money supply will lead to a(n): a. increase in both the price level and real GDP
b. decrease in both the price level and real GDP. c. increase in real GDP and a decrease in the price level. d. decrease in real GDP and an increase in the price level. e. increase in the price level only.
For the past several decades, the U.S. M1 multiplier has been between
A. 0.5 and 2.5. B. 1.0 and 3.0. C. 3.0 and 6.0. D. 0 and 10.0.
Answer the following questions true (T) or false (F)
1. The short run is the time period during which a firm has at least one input constraint. 2. A characteristic of the long run that is not available in the short run is that a firm is free to vary its output. 3. Consider a manufacturing operation that uses specialized machinery and labor to produce its output. In this case, the input that is not fixed in the short run is labor.
Which of the following statements is true?
A. Approximately 25 percent of Americans live in poverty. B. American poverty is less severe than global poverty. C. American poverty is defined by homelessness and malnutrition. D. American poverty standards are below world poverty standards.