Explain why in cities such as New York City that have rent ceiling laws, so many people who work in the city commute from outside the city
What will be an ideal response?
Rent ceilings decrease the quantity supplied of housing. So many people who work in the city and would like to live in the city cannot find housing. As a result, they must live outside the city and commute to work.
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Net exports are the sum of
A) the current account balance and capital account balance. B) the balance of payments accounts. C) exports and imports. D) the private sector balance and the government sector balance. E) the current account balance and the official settlements account balance.
If the level of consumption is $100 billion and disposable income is $125 billion, then the
A) APC = 0.6 and saving is positive. B) APC = 0.8 and saving is negative. C) APC = 0.8 and saving is positive. D) APC = 0.6 and saving is negative.
The basic human tendency to overvalue recent experience when trying to predict the future is called:
A. tulip mania. B. the leverage effect. C. herd instinct. D. the recency effect.
Which of the following tends to make the size of a shift in aggregate demand resulting from an increase in government purchases smaller than it otherwise would be?
a. the multiplier effect b. the crowding-out effect c. the accelerator effect d. All of the above are correct.