When the economy is creating less output than its potential, it means:
A. there are some resources that are unemployed.
B. the economy is in an economic boom.
C. contractionary policy needs to be enacted.
D. governments are likely to reduce their spending.
A. there are some resources that are unemployed.
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Why might an oil cartel's effectiveness be undermined during a recession but strengthened during an economic boom?
What will be an ideal response?
Answer the following statements true (T) or false (F)
1. The quantity supplied is inversely related to price. 2. If demand and supply increase by the same amount, equilibrium price will rise. 3. If supply increases more than demand, equilibrium price will fall. 4. A change in demand occurs whenever consumers will purchase more because of a decrease in price. 5. An increase in demand tends to increase both the equilibrium price and the amount of a commodity exchanged.
If price is initially above the equilibrium level,
A) the supply curve will shift rightward. B) the supply curve will shift leftward. C) excess supply exists. D) all firms can sell as much as they want.
Demand determines ________ entirely when ________ is perfectly inelastic.
A. price and quantity; demand B. price and quantity; supply C. price; supply D. quantity; supply