What is a good argument for using the model of the consumer despite the fact that it requires making many simplifying assumptions?
A) It is complex to solve.
B) The assumptions are sometimes realistic.
C) It explains observed patterns of behavior.
D) It is used in many scholarly fields.
C
Economics
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The money income of households consists of all the following, except:
A. Wages B. Profits C. Interest D. Revenues
Economics
Refer to the diagram and assume the economy initially is in equilibrium at point a. In the mainstream view, a decline in aggregate demand from AD 1 to AD 2 would likely move the economy:
A. directly from a to d.
B. directly from a to b.
C. from a to c, then quickly from c to d.
D. from a to c, then eventually from c to b.
Economics