Which of the following statements is an example of confusing association and causation?
A. Senator Jones believes that more tax revenue should be distributed to the poor.
B. A map includes roads, but not every restaurant, telephone pole, andÂ
C. Interest rates rise when it rains, all other factors constant.
D. When the price of Coca-Cola increases, consumers buy more Pepsi, all other factors constant.
Answer: C
You might also like to view...
If there is a permanent increase in demand for the product of a perfectly competitive industry, the process of transition to a new long-run equilibrium will include:
a. the entry of new firms. b. Neither the entry of new firms nor temporarily higher profits is correct. c. temporarily higher profits. d. Both the entry of new firms and temporarily higher profits are correct.
Forward commitment by the Fed has which of the following impacts?
A. Forward commitment encourages lending because banks do not fear that the Fed will suddenly reverse the policy. B. Forward commitment encourages excessive lending as banks try to take control of as many reserves as possible before the policy is exhausted. C. Forward commitment eliminates all flexibility in monetary policy. D. Forward commitment creates moral hazard in lending, as banks know that the Fed will continue to pump reserves into the system.
An increase in the labor force participation rate
A) means there are more discouraged workers. B) implies that the unemployment rate must fall. C) implies that the unemployment rate must rise. D) is consistent with either a rise or a fall in the unemployment rate.
Is the value of U.S. exports typically larger or smaller than the value of U.S. imports?
What will be an ideal response?