Economists often evaluate a theory in terms of how consistently and accurately it predicts what happens. Implicit in this position is the belief that
A) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory is a good explanation of how things work.
B) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory will be accepted by others.
C) if the theory's predictions are consistently accurate, then there is a fairly good chance that the theory's assumptions (even if they initially seem unrealistic) capture something that is essential to explaining what it is that the theory is trying to explain.
D) all of the above
D
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Friedman measured "permanent" income by assuming that people adjusted their consumption on the basis of
A) an "error learning" process with respect to their expected income. B) an adaptive expectation formation of their expected income. C) transitory income and the level of income expected over a period of years in the future. D) All of the above.
The national debt
a. is increased by budget surpluses. b. is the value of the government's indebtedness at a moment in time. c. exceeded $20 trillion in 2014. d. All of the above are correct.