A characteristic of a good model is that
A) its predictions can be tested using real-world data.
B) it is useful for making irrefutable predictions.
C) it applies to all situations.
D) it predicts perfectly.
Answer: A
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All of the following are financial institutions that accept deposits and make loans to people and businesses EXCEPT
A) central banks. B) savings and loans. C) savings banks. D) commercial banks. E) credit unions.
The demand curve shifts rightward from D0 to D1 when the U.S. interest rate ________ and foreign interest rates are unchanged. The demand curve shifts rightward from D0 to D1 when the expected future exchange rate ________
A) falls; rises B) rises; rises C) falls; falls D) rises; falls E) None of the above answers is correct because the factors mentioned lead to movements along the demand curve and not to shifts of the demand curve.