An increase in the number of students graduating with a major in psychology would result in
a. a decrease in the supply of psychologists that would increase the wage of psychologists and decrease the number employed.
b. an increase in the supply of psychologists that would decrease the wage of psychologists and increase the number employed.
c. a decrease in the demand for psychologists that would decrease the wage of psychologists and decrease the number employed.
d. an increase in the demand for psychologists that would increase the wage of psychologists and increase the number employed.
B
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Economists make assumptions because
a. they need to incorporate value judgments into their models. b. analysis without assumptions would be impossibly complex. c. they always have imperfect information about reality. d. assumptions are the final product of careful economic analysis. e. assumptions allow economists to ignore things that they cannot explain.
Assume that the central bank increases the reserve requirement. If the nation has highly mobile international capital markets and a flexible exchange rate system, what happens to the real risk-free interest rate and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). b. There is not enough information to determine what happens to these two macroeconomic variables. c. The real risk-free interest rate and net nonreserve-related international borrowing/lending remain the same. d. The real risk-free interest rate rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). e. The real risk-free interest rate falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive).