Someone notices that sunspot activity is high just prior to recessions and concludes that sunspots cause recessions. This person has
a. confused association and causation.
b. misunderstood the ceteris paribus assumption.
c. used normative economics to answer a positive question.
d. built an untestable model.
A
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Sammy has a drone that he values at $1,500. Dean values the same drone at $2,000. Sammy decides to sell the drone to Dean for $1,800. If the government imposes a $250 tax on the sale of drones,
A) Sammy and Dean would not be able to complete the transaction. B) Sammy and Dean would still be able to complete the transaction. C) the tax would cause a deadweight loss of $500. D) Both A and C are correct.
Refer to the information. The $40 billion deposit of new currency will support total checkable deposits of:
Answer the question on the basis of the following information about a banking system: new currency deposited in the system = $40 billion; legal reserve ratio = 0.20; excess reserves prior to the currency deposit = $0. A. $160 billion. B. $200 billion. C. $40 billion. D. $128 billion.