Economics is called an empirical science because :

Economics is called an empirical science because
 
  A) economists study real-world evidence to test their models.
  B) economists use assumptions in their models.
  C) economic models have no predictive power.
  D) economic analysis is only useful in a capitalistic society.

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Ques. 2

Real standards of living can increase
 
  A) if the country is producing the same amount they traditionally have and are enjoying more leisure time.
  B) only if there is positive economic growth.
  C) if there is positive growth in the manufacturing sector.
  D) only at the cost of increased urban congestion.

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Ques. 3

Would it take longer for a labor market to move to a new equilibrium for house painters or architects? Why?
 
  What will be an ideal response?

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Ques. 4

When people want to hold money to make regular planned expenditures, this is
 
  A) the transaction demand for money.
  B) the asset demand for money.
  C) the precautionary demand for money.
  D) the spending demand for money.

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Ques. 5

Saving represents
 
  A) a source of funds for business investment.
  B) a normal part of the circular flow of income and output.
  C) an injection to the circular flow of income and output.
  D) a counter-example to Say's law that the classical economists never considered.

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Ques. 6

The Social Security system was founded
 
  A) during the Civil War, to pay pensions for veterans.
  B) during the last years of the nineteenth century, as people who had once depended on having a family farm found themselves without a means of support.
  C) as the United States began to recover from the Great Depression.
  D) in response to concerns that arose during the high inflation of the 1970s.

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Ques. 7

When there is an external cost, the unregulated market
 
  A) overproduces the good or service.
  B) underproduces the good or service.
  C) reaches the most efficient solution.
  D) minimizes public welfare.

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Ques. 8

If we are interested in knowing whether a poor country is improving economically, we want to know not only what the economic growth rate is, but also
 
  A) whether the economic growth rate is faster than other nations' growth rates.
  B) whether government spending is growing at the same rate.
  C) whether the economic growth rate is greater than last year's rate.
  D) whether the lowest income groups are benefiting from the growth.