Suppose an economist develops a theory that higher food prices arise from higher gas prices. According to the scientific method, which of the following is the economist's next step?
a. Collect and analyze data.
b. Go to a laboratory and generate data to test the theory.
c. Publish the theory without testing it.
d. Consult with other economists to see they agree with the theory.
a
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Refer to Figure 10.7. A movement from point B to point D could be caused by
A) an increase in the target interest rate. B) an increase in consumer confidence. C) an increase in the term structure effect. D) a decrease in the expected rate of inflation.
The "medium of exchange" function of money means it is the:
a. The unit in terms of which people write contracts. b. Barter value of a product for which a nation has a comparative advantage. c. Unit in terms of which everything is valued and the basis for establishing relative prices between goods and services. d. Asset individuals get for goods and services and then use later to purchase other goods and services. e. Asset people can use to accumulate wealth.