It is not uncommon for business professors to make a statement such as the following: "While economists are happy in their never-never land of economic theory, we business professors seriously study facts of the real world"
According to your textbook, the statement is A) generally true.
B) misleading; even business professors rely upon theories to discriminate among and make sense out of the facts they choose to study.
C) confused, because in actuality it is the business professors who are trapped in the never-never land of theory, while the economists seriously study real-world facts without using theories.
D) false, because economics and business are one and the same discipline.
B
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When the exchange rate between the U.S. dollar and the euro changes from 1.07 euros per dollar to 0.93 euros per dollar, then the
A) U.S. dollar has depreciated against the dollar. B) U.S. dollar has depreciated against the euro. C) euro has depreciated against the dollar. D) U.S. dollar has appreciated against the euro. E) euro has depreciated against the euro.
According to the theory of liquidity preference,
a. if the interest rate is below the equilibrium level, then the quantity of money people want to hold is less than the quantity of money the Fed has created. b. if the interest rate is above the equilibrium level, then the quantity of money people want to hold is greater than the quantity of money the Fed has created. c. the demand for money is represented by a downward-sloping line on a supply-and-demand graph. d. All of the above are correct.