A Student Noted That the Football Team Won by a Larger

question 183

Multiple Choice

A student noted that the football team won by a larger margin when the third-string played more minutes. Therefore, he recommended that the third-stringers become the first team. His conclusion was probably erroneous because he

• A) confused positive and normative analysis.
• B) committed the fallacy of composition.
• C) failed to recognize that association is not causation.
• D) confused macroeconomics with microeconomics.

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Definitions:

Exports

Goods or services produced in one country and sold to buyers in another country, contributing to a nation's economy.

Nominal Exchange Rate

The speed at which one form of currency can be traded for another.

Currency

A system of money in general use in a particular country or economic context.

Real Exchange Rate

The value of a currency in terms of another currency, adjusted for differences in price levels between countries.