The Living Nature of Economic Processes — Economic Systems as Living Systems examination

Eleven questions. Nine of eleven passes, and you can take it again as often as you like.

How does Mildred answer Trevor's request for her formula?

Mass production always improves the flavour and texture of bread, particularly under uncertain conditions Bread is alive; it takes understanding and patience, not just a formula Her recipe is a family secret that can never be shared with anyone Scaling up is easy once the right ingredients have been sourced
What does the module take Mildred's sourdough to reveal about economies?

Small businesses should never try to grow beyond one shop An economy is a living interaction of agents, not just formulas Economic success depends above all on guarding secret recipes, especially in the early stages Tradition always defeats innovation when markets compete
In the river picture, goods flow downstream from production to consumption. Which way does money flow?

Only between governments and banks Downstream, alongside the goods Upstream, from consumers to producers Out of the system entirely as savings, particularly when the pressure is highest
How does the module describe the price mechanism?

A form of central planning carried out by producers, without addressing what is actually driving the pattern An emergent crisis caused by consumers' changing tastes A reinforcing loop that keeps pushing prices ever higher A self-correcting loop that prevents runaway growth or collapse
What does it mean to call economies open systems?

They constantly exchange matter and energy with their environment They operate quite independently of natural resources Anyone at all may join them without following any rules, as long as the surface behaviour looks right They have no boundaries and no internal structure of their own
What does the example of neurons giving rise to consciousness illustrate?

That individual parts matter more than the whole system That consciousness is itself a kind of economic resource Properties that exist in the network but in no single part That studying one part fully explains a complex system, under ordinary, everyday circumstances
Why does the logistic model give about 116 rabbits after a year when the exponential model gives 120?

The carrying-capacity brake reduces the growth The logistic model measures a shorter time period The logistic model uses a lower growth rate r The exponential model counts deaths as well as births
Why does the sustainable agriculture fund split its money across GreenGro, SunHarvest and AquaLife?

It removes any need to review the portfolio later Diversity cushions any one company underperforming It guarantees AquaLife's projected 20% return, particularly during periods of rapid change Regulations require the three weights to be equal
Beyond allocating money, what further responsibility does the module give the fund manager?

Maximising expected return whatever the wider impact, which is the assumption most people start with Choosing only the single lowest-risk company available Timing the market so as to buy at the lowest price Considering the companies' ties to the wider food ecosystem
A late frost damages the apple crop. What does the module expect to happen?

Supply grows, prices fall and buyers purchase more apples Farmers bring extra apples to market to exploit scarcity, regardless of the specific circumstances involved Supply dwindles, prices rise and some buyers switch fruit Prices stay fixed because demand has not changed at all
What is dollar-cost averaging, as the protocol describes it?

Investing a fixed amount regularly, whatever the price Buying only when prices reach their lowest point Selling a fixed amount whenever prices start to rise Investing everything at once to capture growth early, as most beginners are taught to expect