The level of detail in an economic model
a. is as close as possible to the level of detail in reality
b. depends on the purpose of the model
c. is as complex as possible
d. is the same regardless of the purpose of the model
e. is as complex as possible to accomplish its purpose
B
Economics
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Insurance is possible and can be profitable because of
A) private information. B) adverse selection. C) moral hazard. D) consumers are risk aversion.
Economics
Refer to Figure 23-3. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $400 billion. If the MPC is 0
75, then what is the distance between N and L or by how much did government spending change? A) $10 billion B) $100 billion C) $200 billion D) $300 billion
Economics