Why is macroeconomic forecasting so difficult? Does this difficulty mean economics is a worthless field of study?
What will be an ideal response?
Forecasting is difficult because our understanding of how the economy works is imperfect and because it's impossible to take into account all the factors that might affect future economic trends. This just means the field of economics is difficult and complex, not that it's worthless.
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In the model of aggregate demand and aggregate supply, the initial impact of an increase in consumer optimism is to
A. shift long-run aggregate supply to the left. B. shift aggregate demand to the right. C. shift short-run aggregate supply to the left. D. shift short-run aggregate supply to the right. E. shift aggregate demand to the left.
Which of the following would not be considered a synergistic benefit from a merger?
A) an improvement in distribution systems B) economies of scale in production C) decreased cost of capital D) None of the above