Each of the following statements about the use of models in the study of economics is true EXCEPT:
A) models fit the observed facts exactly.
B) models are sometimes revised in light of new research findings.
C) models are easier to manipulate than the reality they represent.
D) models contain the essential features of the economic behavior being studied.
Ans: A) models fit the observed facts exactly.
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On the graph above, if output is falling, while the quantity demanded is rising, the economy may be at a point on ________
A) the aggregate supply curve above the aggregate demand curve B) the aggregate supply curve below the aggregate demand curve C) the aggregate demand curve above the aggregate supply curve D) the aggregate demand curve below the aggregate supply curve E) none of the above
Inventory investment can be defined as
A. the value of monetary transactions by businesses. B. goods that must be excluded from the GDP to avoid double counting. C. the system of accounts that is used to count certain goods. D. changes in the stocks of finished goods and raw materials.
A firm will increase its spending on advertising until
A) it has monopolized the market. B) it has deterred all future entry. C) the marginal benefit of advertising is zero. D) the marginal benefit of advertising equals the marginal cost of advertising.
Ceteris paribus, a change in the quantity supplied along the supply curve of Braun coffee makers is:
a. directly related to the price of a Morphy Richards coffee maker. b. directly related to the price of milk and cream. c. directly related to the prices of inputs used in the production of Braun coffee makers. d. directly related to changes in the technology used in producing coffee makers. e. directly related to the price of a Braun coffee maker.