In setting the price of its product, a monopolistic competitor sets the price equal to its marginal cost plus an amount called the

________ in the foreign interest rate causes the demand for domestic assets to ________ and the domestic currency to depreciate, everything else held constant

A) An increase; increase B) An increase; decrease C) A decrease; increase D) A decrease; decrease

Which of the following is not correct about most economic models?

a. They are composed of equations and diagrams. b. They contribute very little to economists' understanding of the real world. c. They omit many features of the real-world economy. d. In constructing models, economists make assumptions.