Economic models
A) must capture every detail or interrelationship that exists.
B) are simplified representations of the real world.
C) must use laboratory experiments.
D) All of the above are correct.
Answer: B
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Which of the following equations captures the aggregate capital stock of the economy in this year, Know?
A) Know = (1 - depreciation rate) × Klastyear + I B) Know = (1 + depreciation rate) × Klastyear + I C) Know = (1 - depreciation rate) × Klastyear × I D) Know = (1 - depreciation rate) × Klastyear - I The depreciation rate of capital in an economy is 10%. The investment on capital in the current year is $500.
One desirable aspect of having multiple levels of government is that numerous small governments _____
a. leads to a prisoners' dilemma b. allows for the possibility of intergovernmental competition c. affect the optimal size of the sharing group d. demonstrate how effective the federal government is at what it does