The scientific method refers to the process by which economists and other scientists:
A) plot graphs to illustrate relationships between different economic variables.
B) develop models of the world and test those models with data.
C) develop models to explain the past but not to predict the future.
D) collect data for further use in research.
B
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A tax rate system characterized by higher marginal tax rates as income increases is known as
A) a progressive tax system. B) a regressive tax system. C) a proportional tax system. D) a flat-rate tax system.
New Keynesian economists generally argue that
A) there is an exploitable tradeoff between unemployment and inflation. B) changes in aggregate demand will have relatively greater effects on real GDP when firms change prices less frequently. C) activist policy can be used to reduce the fluctuations in real GDP. D) all of the above