Why do economists test their hypotheses?
A) to see whether people are motivated by self-interest
B) to see whether their models predict the choices people will make
C) to determine whether government policies have effectively achieved their goals
D) to learn what people are thinking when they make the choices they do
B
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The concept of "the invisible hand" suggests that markets
A) do not produce the efficient quantity. B) are always fair. C) produce the efficient quantity. D) are unfair. E) allocate resources unfairly and inefficiently.
According to the quantity theory of money, in the long run, an increase in the quantity of money results in an equal percentage increase in ________
A) the price level B) the growth rate of real GDP C) the inflation level D) the growth rate of potential GDP