A newspaper story recently reported that the price of new cars has decreased and the quantity of new cars sold has dropped. The new price and quantity could have been caused by:
What will be an ideal response?
a decrease in buyers' incomes.
You might also like to view...
Explain Paul Romer's ideas concerning economic growth
What will be an ideal response?
When the economy operates well below its productive capacity, an increase in any spending— whether it's government's or the private sector's—tends to be reflected primarily in a(n)
a. lower level of employment b. increase in price c. lower level of output d. higher level of output and employment e. increase in business inventories
The capital stock is fixed at 50 units, the price of capital is $30 per unit, and the price of labor is $25 per unit. 
Given the above, if the firm produces 30 units of output, how many units of labor does the firm use?
A. 54 B. 45 C. 30 D. 60 E. none of the above
Assume the current one-year interest rate on a bond is 2%, and the one-year expected rate a year from now is 3%. According to the expectations theory of the term structure of interest rates, the two-year interest rate is
A. 2%. B. 2.5%. C. 3%. D. 5%.