Behavioral economics
a. helps explain why economic decision makers maximize either utility or profit
b. assumes that people behave "as if" they are maximizing something.
c. is a subfield of economics, but one that is rejected by most economists
d. explains why irrational behavior is better than typically "rational" behavior.
e. points out that some human behavior is not consistent with any type of maximization
E
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When PPP does not hold in the short run, economists have developed an alternative short run explanatory theory based on the idea that:
a. currency values are different from other prices, since currencies are not considered assets. b. currency values are influenced in the short run because they serve as short-term assets. c. currency values will eventually result in PPP over time, so no short-run theory is needed. d. currency values are set by government entities and the IMF so the value often does not result in PPP.
Free trade refers to trade between countries without government restrictions
Indicate whether the statement is true or false