Which of the following is FALSE, regarding economics as a science?

a. Economic knowledge is obtained through the scientific method, just as in any other science.

b. It is difficult to conduct experiments in economic matters.

c. Economists pay close attention to natural experiments resulting from historical events.

d. Economic theories represent irrefutable facts.

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2.
Economists use assumptions in order to:

a. recreate real situations accurately, with all their complexity.

b. avoid dealing with issues they would rather not talk about.

c. simplify economic theories, so as to make it possible to answer economic questions.

d. make their theories more realistic.


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3.
Economic models are:

a. simplified versions of economic theories.

b. All of the other options are true.

c. created by making assumptions.

d. usually composed of diagrams and equations.


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4.
All of the following are characteristics of the circular-flow model of the economy, EXCEPT:

a. the model has two markets: one for goods and services and one for factors of production.

b. the model includes two sectors: firms and households.

c. the model describes two circular flows: one for inputs and one for outputs.

d. the two flows described by the model move in opposite directions.


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