If consumption changes because of a change in the price level, then the
A) economy moves from one point on an AD curve to another point on the same curve.
B) AD curve shifts.
C) economy moves from one point on a SRAS curve to another point on the same curve.
D) SRAS curve shifts.
E) none of the above
A
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Studies of human decision-making have detected systematic mistakes that people make. Which of the following have been detected?
a. people are overconfident b. people give too much weight to a small number of vivid observations c. people are reluctant to change their minds d. All of the above are correct.
A lender usually knows less about the creditworthiness of a borrower than the borrower does. This is an example of:
A. information asymmetry. B. opportunistic behavior. C. diminishing marginal returns. D. economies of scale.