If a natural disaster were to cause a negative long-run supply shock to the economy, once the economy adjusts, the new equilibrium will be at a:
A. higher price level and lower level of output.
B. lower price level and lower level of output.
C. higher price level and higher level of output.
D. lower price level and higher level of output.
Answer: A
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Indifference curves are convex to the origin because of:
A) transitivity of consumer preferences. B) the assumption of a diminishing marginal rate of substitution. C) the assumption that more is preferred to less. D) the assumption of completeness. E) none of the above
Which of the following is a possible solution to the adverse selection problem?
a. Screening b. Signaling c. All of the above d. None of the above
A bank run is:
A. the situation that arises from fear that the bank is in danger of running out of money. B. when all depositors from a single bank demand to withdraw all deposits at once. C. when a bank's reserves are not enough to satisfy all withdrawal demands. D. All of these are true.
Recession
What will be an ideal response?