Question 1

Good assumptions simplify a problem without substantially affecting the answer.

Accepted Answer

A) True 
 B)False  True

Question 2

Which of the following statements about models is correct?

Accepted Answer

A) The more details a model includes, the better the model. 
B) Models assume away irrelevant details. 
C) Models cannot be used to explain how the economy functions. 
D) Models cannot be used to make predictions. 
A) The more details a model includes, the better the model. 
B) Models assume away irrelevant details. 
C) Models cannot be used to explain how the economy functions. 
D) Models cannot be used to make predictions. B

Question 3

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

Accepted Answer

A) Deterministic 
B) Micro 
C) Macro 
D) Chaos 
A) Deterministic 
B) Micro 
C) Macro 
D) Chaos D

Question 4

A student's final mark and amount of time spent studying for the module are generally

Accepted Answer

A) positively correlated. 
B) negatively correlated. 
C) uncorrelated. 
D) quasi-correlated. 
A) positively correlated. 
B) negatively correlated. 
C) uncorrelated. 
D) quasi-correlated.

Question 5

Instead of conducting laboratory experiments to generate data to test their theories, economists often

Accepted Answer

A) ask winners of the Nobel Prize in Economics to evaluate their theories. 
B) argue that data is impossible to collect in economics. 
C) gather data from historical episodes of economic change. 
D) assume that data would support their theories. 
A) ask winners of the Nobel Prize in Economics to evaluate their theories. 
B) argue that data is impossible to collect in economics. 
C) gather data from historical episodes of economic change. 
D) assume that data would support their theories.

Question 6

An endogenous variable

Accepted Answer

A) is a variable whose value is determined outside the model. 
B) is a variable whose value is determined within the model. 
C) is a variable from another country. 
D) cannot be proven wrong. 
A) is a variable whose value is determined outside the model. 
B) is a variable whose value is determined within the model. 
C) is a variable from another country. 
D) cannot be proven wrong.

Question 7

"An increase in interest rates will lower economic growth." This statement is

Accepted Answer

A) a positive economic statement. 
B) a normative economic statement. 
C) untrue in every case. 
D) controversial, and so not a valid economic issue. 
A) a positive economic statement. 
B) a normative economic statement. 
C) untrue in every case. 
D) controversial, and so not a valid economic issue.

Question 8

The ultimate purpose of an economic model is to

Accepted Answer

A) explain reality as completely as possible. 
B) establish assumptions that closely resemble reality. 
C) help us to understand economic behaviour. 
D) guide government policy decisions. 
A) explain reality as completely as possible. 
B) establish assumptions that closely resemble reality. 
C) help us to understand economic behaviour. 
D) guide government policy decisions.

Question 9

Economists try to address their subject with a scientist's objectivity.

Accepted Answer

A) True 
 B)False

Question 10

What is the difference between rational thought and empirical thought?

Accepted Answer

Rationality is a normative con

Question 11

Policymaking in a representative democracy

Accepted Answer

A) is straightforward and does not involve any disagreement. 
B) benefits from the input of economists, even if their advice is not always followed. 
C) is conducted without the input of economists. 
D) is always based exclusively on the results of economic analysis. 
A) is straightforward and does not involve any disagreement. 
B) benefits from the input of economists, even if their advice is not always followed. 
C) is conducted without the input of economists. 
D) is always based exclusively on the results of economic analysis.

Question 12

Which of the following is most closely associated with positive economics?

Accepted Answer

A) Determining the impact of government spending on the actual level of unemployment. 
B) Determining the best level of immigration into a country. 
C) Determining whether too many luxury goods are being produced. 
D) Determining whether or not the government should reduce poverty. 
A) Determining the impact of government spending on the actual level of unemployment. 
B) Determining the best level of immigration into a country. 
C) Determining whether too many luxury goods are being produced. 
D) Determining whether or not the government should reduce poverty.

Question 13

The number of rainy days in the year and annual sales of sun tan lotion are probably

Accepted Answer

A) positively correlated. 
B) negatively correlated. 
C) uncorrelated. 
D) quasi-correlated. 
A) positively correlated. 
B) negatively correlated. 
C) uncorrelated. 
D) quasi-correlated.

Question 14

What is Marxist economics?

Accepted Answer

Marxist economists present different exp

Question 15

A simplifying assumption

Accepted Answer

A) affects the important conclusions of an economic model. 
B) increases the level of detail in an economic model. 
C) limits the validity of an economic model's conclusion. 
D) eliminates unnecessary details from an economic model. 
A) affects the important conclusions of an economic model. 
B) increases the level of detail in an economic model. 
C) limits the validity of an economic model's conclusion. 
D) eliminates unnecessary details from an economic model.

Question 16

A government minister states that wage rates in the country have risen by 2 per cent in the past year.The head of a trade union states that wage increases should have been higher.The minister's statement is a __________ economic statement, and the union leader's statement is a __________ economic statement.

Accepted Answer

A) normative; normative 
B) normative; positive 
C) positive; normative 
D) positive; positive 
A) normative; normative 
B) normative; positive 
C) positive; normative 
D) positive; positive

Question 17

Economists often disagree about the validity of ______________ about how the world works.

Accepted Answer

A) alternative collections 
B) alternative norms 
C) alternative judgements 
D) alternative positive theories 
A) alternative collections 
B) alternative norms 
C) alternative judgements 
D) alternative positive theories

Question 18

Explain how economists can claim to act as scientists.

Accepted Answer

Economists can act as scientis

Question 19

If two variables tend to increase and decrease together, they are

Accepted Answer

A) positively correlated. 
B) negatively correlated. 
C) uncorrelated. 
D) quasi-correlated. 
A) positively correlated. 
B) negatively correlated. 
C) uncorrelated. 
D) quasi-correlated.

Question 20

Which of the following is not correct?

Accepted Answer

A) Economists use some familiar words in specialised ways. 
B) Economics has its own language and its own way of thinking, but few other fields of study do. 
C) Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D) The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live. 
A) Economists use some familiar words in specialised ways. 
B) Economics has its own language and its own way of thinking, but few other fields of study do. 
C) Supply, demand, elasticity, comparative advantage, consumer surplus, and deadweight loss are all terms that are part of the economist's language. 
D) The value of the economist's language lies in its ability to provide you with a new and useful way of thinking about the world in which you live.

Good assumptions simplify a problem without substantially affecting the answer.

Which of the following statements about models is correct?

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

A student's final mark and amount of time spent studying for the module are generally

Instead of conducting laboratory experiments to generate data to test their theories, economists often

An endogenous variable

"An increase in interest rates will lower economic growth." This statement is

The ultimate purpose of an economic model is to

Economists try to address their subject with a scientist's objectivity.

What is the difference between rational thought and empirical thought?

Policymaking in a representative democracy

Which of the following is most closely associated with positive economics?

The number of rainy days in the year and annual sales of sun tan lotion are probably

What is Marxist economics?

A simplifying assumption

A government minister states that wage rates in the country have risen by 2 per cent in the past year.The head of a trade union states that wage increases should have been higher.The minister's statement is a economic statement, and the union leader's statement is a economic statement.

Economists often disagree about the validity of ______________ about how the world works.

Explain how economists can claim to act as scientists.

If two variables tend to increase and decrease together, they are

Which of the following is not correct?

What Is Economics

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters

Exam 2: Thinking Like an Economist

Good assumptions simplify a problem without substantially affecting the answer.

Which of the following statements about models is correct?

_________ theory further tells us that even minor errors in measurements or assumptions can be amplified to a great extent, rendering forecasts useless.

A student's final mark and amount of time spent studying for the module are generally

Instead of conducting laboratory experiments to generate data to test their theories, economists often

An endogenous variable

"An increase in interest rates will lower economic growth." This statement is

The ultimate purpose of an economic model is to

Economists try to address their subject with a scientist's objectivity.

What is the difference between rational thought and empirical thought?

Policymaking in a representative democracy

Which of the following is most closely associated with positive economics?

The number of rainy days in the year and annual sales of sun tan lotion are probably

What is Marxist economics?

A simplifying assumption

Economists often disagree about the validity of ______________ about how the world works.

Explain how economists can claim to act as scientists.

If two variables tend to increase and decrease together, they are

Which of the following is not correct?

What Is Economics

Measuring a Nations Well-Being

Measuring the Cost of Living

Production and Growth

Unemployment

Saving, Investment and the Financial System

The Basic Tools of Finance

The Monetary System

Money Growth and Inflation

Open-Economy Macroeconomics: Basic Concepts

A Macroeconomic Theory of the Open Economy

Business Cycles

Keynesian Economics and the Is-Lm Analysis

Aggregate Demand and Aggregate Supply

The Influence of Monetary and Fiscal Policy on Aggregate Demand

The Short Run Trade-Off Between Inflation and Unemployment

Supply Side Policies

The Financial Crisis and Sovereign Debt

Common Currency Areas and European Monetary Union

Filters