Why do economists abstract, and is it appropriate?
What will be an ideal response?
Economists (and other scientists) abstract in order to be able to focus on key variables. It is appropriate, because the economy is very complex; trying to keep track of everything is extremely difficult. Thus, economists focus on relevant variables and ignore those that are less relevant to the problem at hand. Abstraction allows focus on the forest instead of the trees.
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Describe the major sources of tax revenue and expenditures for the federal government
In the long run
a. both supply and demand shocks have permanent effects on real GDP. b. real GDP can remain below potential. c. real GDP can remain above potential. d. both supply and demand shocks have no effect on real GDP. e. supply shocks have permanent effects on real GDP but demand shocks have no effect.