A person who uses a rule of thumb to determine the best rate of savings:
A. is necessarily making a mistake, since finding the best rate of savings involves complex mathematical models.
B. is necessarily making a mistake, since there is no single best rate of savings.
C. is not necessarily making a mistake because rules of thumb often arise out of trial and error or from observation of others' successful decisions.
D. is not necessarily making a mistake because, in the long run, all rates of savings turn out to yield the same economic benefit.
C. is not necessarily making a mistake because rules of thumb often arise out of trial and error or from observation of others' successful decisions.
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All of the following are market determinants of exchange rates EXCEPT
A) changes in productivity in one country relative to another. B) changes in real interest rates in one country relative to another. C) changes in product preferences between countries. D) changes in the relative prices of goods and services within a country.
The government has just passed a law requiring that all residents earn the same annual income regardless of work effort. This law is likely to
a. increase efficiency and increase equality. b. increase efficiency but decrease equality. c. decrease efficiency but increase equality. d. decrease efficiency and decrease equality.