One reason consumers were able to assume an increasing amount of household debt during the 2000s is because:
A. interest rates were so low that it made borrowing easier.
B. interest rates were so low that people found it very easy to save their extra income.
C. even though interest rates were high, the inflated values of homes allowed them to afford it.
D. even though interest rates were high, the herd instinct gave people a false confidence in their future wealth.
Answer: A
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A good proxy for the flow of consumption services would be
A) aggregate consumption. B) consumption of services and consumption of durables. C) consumption of durables and consumption of nondurables. D) consumption of nondurables and consumption of services.
In long-run equilibrium, a perfectly competitive firm's short-run marginal cost curve crosses the long-run average cost curve at the lowest point on the long-run average cost curve
a. True b. False Indicate whether the statement is true or false
Which of the following statements is true?
a. Disinflation is an increase in the rate of inflation. b. Real income is the actual number of dollars received over a period of time. c. The consumer price index (CPI) measures changes in the average prices of consumer goods and services. d. Deflation is an increase in the general level of prices.
The key characteristics of a monopolistically competitive industry? are:
?[A] A large number of firms that sell differentiated products that are close substitutes. ?[B] Firms can easily enter or exit a monopolistically competitive industry. ?[C] Because monopolistically competitive firms can increase their profits if they can successfully distinguish their products from those of their? rivals, they have an incentive to engage in sales promotions and advertising.