If the central bank increases the money supply, in the short run, output
a. rises so unemployment rises.
b. rises so unemployment falls.
c. falls so unemployment rises.
d. falls so unemployment falls.
b
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It is essential to establish specific criteria to judge the performance of any economic system. Two such criteria are
A) efficiency and equity. B) profit opportunities and technological progress. C) efficiency and profit opportunities. D) technological progress and achieving general equilibrium.
Economics is an empirical science, which means that economists
A) must use laboratory experiments to test their theories. B) evaluate a model or theory by whether its assumptions are consistent with the real world. C) try to prove their models are true by referring to logic. D) look for evidence to determine whether the model is useful or not.