A good economic model
A) describes every aspect of the economic world, with no exception.
B) includes all those features of the world that can be described numerically.
C) includes only those features of the world that are needed for the purpose at hand.
D) should not include more than two variables.
C
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When computing percentage changes, using the simple approach results in increases and decreases which are
A) identical. B) symmetric. C) more accurate than using the midpoint method. D) not symmetric.
In a two-period model with default, if the nation defaults on its debts in the future period
A) there are no consequences. B) it bears a cost v. C) collateral is seized. D) it faces a higher interest rate.
A country has a comparative advantage in a product if the world price is _____ than that country's domestic price without trade
Fill in the blank(s) with correct word
The theory of liquidity preference is most helpful in understanding
a. the wealth effect. b. the exchange-rate effect. c. the interest-rate effect. d. misperceptions theory.