Which criterion is NOT useful when evaluating a theory?
A) It has predictive power.
B) It fits one's pre-conceived bias.
C) It offers a model consistent with investor behavior.
D) It explains actual data well.
B
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When the supplier of an artificially scarce good charges a price greater than zero, then the:
a. good becomes nonexcludable. b. supplier reduces producer surplus from what it would be if the price were zero. c. supplier reduces consumer surplus from what it would be if the price were zero. d. supplier gives rise to the free-rider problem.
All other things equal, an increase in government spending that is NOT funded by taxes will
A) have an undetermined effect on the current account. B) have no effect on the current account. C) increase the current account deficit. D) decrease the current account deficit.