The foreign holdings of U.S. dollars
a. are hard to explain since the dollar is not legal tender outside the United States.
b. have decreased substantially during the last decade.
c. indicate that foreigners have confidence in the monetary policy and economy of the United States.
d. are largely held in countries with a lengthy historical record of monetary and price stability.
C
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A structured and simplified version of reality that can be used to explain real-world behavior is called
A) an economic model. B) a rationality assumption. C) a postulate. D) a normative alternate reality.
In the classical model, how do shifts in aggregate demand affect real GDP?
A) Real GDP will remain unchanged. B) Increases in aggregate demand increase real GDP. C) Increases in aggregate demand decrease real GDP. D) Decreases in aggregate demand increase real GDP.
Return to the case of Jan, the hyperbolic discounter from the previous question. What values of B and C will lead her to be consistent with a plan not to undertake the action?
a. C < B < 2C. b. B < C. c. B > 2C. d. B < C < 2B.
Some business practices that appear to reduce competition, such as resale price maintenance, may have legitimate economic purposes
a. True b. False Indicate whether the statement is true or false