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1) Suppose two economists are arguing about policies that deal with unemployment One economist says the government should fight unemployment because it is the greatest social evil The other economist response Nonsense Inflation is the greatest social evil These economists ? a. really don’t disagree at all It just appears that they disagree. b. disagree because they have different values. c. none of these answers. d. disagree because they have different scientific judgments.
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2) In making which of the following statements is an economist acting more like a scientist ? a. A reduction in unemployment benefits will reduce the unemployment benefits will reduce the unemployment rate. b. The rate of inflation should be reduced because it robs the elderly of their savings. c. The unemployment rate should be reduced because unemployment robs individuals of their dignity. d. The state should increase subsidies to universities because the future of our country depends on education.
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3) Economic growth is depicted by ? a. a shift in the production possibilities frontier outward. b. a movement from inside the curve toward the curve. c. a shift in the production possibilities frontier inward d. a movement along a production possibilities frontier toward capital goods.
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4) Points on the production possibilities frontier are ? a. inefficient b. normative c. unattainable d. efficient
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5) Which of the following is not a factor of production ? a. labor b. land c. money d. capital
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6) Which of the following is most likely to produce scientific evidence about a theory ? a. A lawyer employed by Renault addressing the impact of air bags on passenger safety. b. An economist permanently employed at a leading university analyzing the impact of bank regulations on lending to small businesses c. An economist employed by the Trades union congress doing research on the impact of trade policy on workers’ wages d. A radio talk show host collecting data from listeners on how capital markets respond to taxation
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7) In which of the following cases is the assumption most reasonable ? a. To address the impact to taxes on income distribution an economist assumes that everyone earns the same income. b. To address the impact of money growth on inflation, an economist assumes that money is strictly coins. c. To model the benefits of trade. an economist assumes that there are two people and two goods d. To estimate the speed at which a beach ball falls, a physicist assumes that if falls in a vacuum.
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8) Economic models are ? a. Usually made of wood and plastic b. built with assumptions. c. useless if they are simple. d. created to duplicate reality.
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9) Which of the following statements regarding the circular-flow diagram is true ? a. If Susan works for BAe Systems and receives a salary payment, the transaction takes place in the market for good and services. b. If BAe Systems sells a military aircraft, the transaction takes place in the market for factors for production c. None of these d. The factors of production are owned by households
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10) The scientific method requires that ? a. the scientist be objective b. The scientific use precision equipment. c. only correct theories are tested d. only theories are tested. e. the scientist uses test tubes and have clean lab.
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