What is the best test of an economic theory?
a. its eloquence
b. the plausibility of its assumptions
c. its ability to predict real-world events, patterns, and changes
d. whether it produces implications that are favored by the researcher
C
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In the figure, when the real wage rate is $10 an hour, ________
A) a shortage of labor exists and the real wage rate will rise B) the demand for labor will increase C) the demand for labor will decrease D) a surplus of labor exists and the real wage rate will fall
While legislation enacted in 1998 granted the Bank of Japan new powers and greater autonomy, its critics contend that its independence is
A) limited by the Ministry of Finance's veto power over a portion of its budget. B) too great because it need not pursue a policy of price stability even if that is the popular will of the people. C) too great since the Ministry of Finance no longer has veto power over the bank's budget. D) limited since the Ministry of Finance can dismiss senior bank officials.