Contractors can use plywood or brick to construct walls. Suppose the price of bricks increases. Which of the figures above best illustrates the effect of this change on the market for plywood?
A) Figure A
B) Figure B
C) Figure C
D) Figure D
E) Figure A or Figure C depending on how contractors react to the higher price of bricks.
A
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Which of the following leads to a fundamental difficulty for stabilization policy?
a. Time lags in policy decisions b. Presence of shock absorbers in the economy c. Absence of data on the effectiveness of policy measures d. Existence of self-correcting mechanism
If aggregate expenditures exceed GDP in a private closed economy:
A. leakages will exceed injections.
B. planned investment will exceed saving.
C. unplanned investment in inventories will occur.
D. saving will exceed planned investment.
When you compare the effects of government spending on aggregate demand with the effects of taxes on aggregate demand, the effects of government spending are
A. smaller. B. larger. C. the same. D. impossible to predict.
Refer to the data provided in Table 17.2 below to answer the following question(s). The table shows the relationship between income and utility for Sue.Table 17.2 IncomeTotal Utility $00$20,00020$40,00040$60,00060$80,00080Refer to Table 17.2. Sue earns $40,000 annually. She has the opportunity to bet her entire salary on the upcoming super bowl. If Sue takes the bet, she will pick the Patriots. She believes that the Patriots have a 50-50 chance of winning the game. If the Patriots win, Sue will double her money ($80,000) but if they lose she loses her entire salary ($0). This bet can be characterized as
A. an unfair bet. B. a fair bet. C. risk-loving. D. risk-neutral.