Economics:
Economics:
10th Edition
ISBN: 9781285859460
Author: BOYES, William
Publisher: Cengage Learning
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Chapter 15, Problem 8E
To determine

Determine the theory that supported or discredited the recent financial crisis. If it was a result of excessive credit, a creation associated with central banks, keeping interest rates too low for too long.

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For each of the following statements, say whether they are True or False,and explain your answer carefully. c) If economic models cannot predict the next credit crunch then economics has simply failed.d) If the government imposes a binding minimum price in a market, then the consumer surplus in that market will increase.e) The existence of inferior goods contradicts the idea that more of a good is preferred to less.f) As firms (consumers) do not actually tend to model their optimal decisions as in the supply (demand) analysis typically presented in most basic textbooks, that type of analysis is useless.g) Pareto optimality means that nobody can be made better off, and thus true Pareto optimality can only be found when the wealth distribution ischaracterized by perfect equality.h) Lowest price guarantees can only be good for consumers
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Economics:
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ISBN:9781285859460
Author:BOYES, William
Publisher:Cengage Learning