Exam 2: Observing and Explaining the Economy

Exhibit 2-2 -Exhibit 2-2 shows the relationship between X and Y between 1980 and 1991.Suppose this correlation between X and Y continues to hold for the next 10 years.If Y declines over the period 1993 through 1998,we would expect

Considering the role government plays,what term best describes the U.S.economy? Why?

There is total agreement in economics among economists and policymakers.

To determine causality in many sciences,researchers

A system in which the government essentially owns and controls all production is called

Economic models need to resemble,as much as possible,the phenomena being explained.

Two variables are correlated if

Explain how economic models are similar to and different from models used in other sciences.What are the consequences of these differences?

When economists explain the relationship between the price of hotdogs and the number that consumers will buy,the ceteris paribus assumption implies that

A model is valid if

If we observe that an increase in the amount of vehicle miles traveled rises after the price of gasoline rises,then we can conclude that

Economics is the only science concerned with politically controversial subjects.

The relative price of gasoline has increased since 2000 because we have paid more dollars for each gallon of gasoline.

What is the difference between microeconomics and macroeconomics?

A mixed system is an economy with only private industries.

Economics is a study that

All microeconomic issues are normative in nature.

The category of economics that contains statements about what ought to be is known as

Indicate whether you expect positive or negative correlation for the following pairs of variables.For each pair,state whether causation exists. (A)The use of sunglasses and the number of sunny days. (B)The number of movie rentals and the number of cable subscriptions. (C)Purchases of candy and purchases of Valentine's Day cards.

The ceteris paribus,or everything else held constant,assumption is used in economics primarily to identify unstable equilibrium situations.