Why do economists tend to create models in diagrammatic form?
a. Diagrams hide reality, and theory is an attempt to avoid reality.
b. It is easier than building models out of physical objects.
c. Economic reality cannot possibly be represented except in diagrams.
d. Most economists are frustrated artists, and like to draw when possible.
e. All of the above are correct.
b
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In an unbalanced oligopoly,
a. one firm has significantly greater market power than any other in the industry b. only one firm exists in the industry c. the industry is rapidly converging into a monopolistically competitive industry d. all firms have near-equal market share e. the four-firm concentration ratio exceeds 100 percent
If the nominal interest rate is high and rising, a possible cause is
A) increased lending activity. B) a rising inflation rate. C) a falling real interest rates. D) increased government borrowing.