When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease.
B. prices, causing them to definitely rise.
C. output, causing it to definitely increase.
D. prices, causing them to definitely fall.
Answer: A
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In the above figure, the sum of real planned investment spending, government expenditures, and net export spending is equal to
A) $0.5 trillion. B) $1.0 trillion. C) $1.5 trillion. D) $2.0 trillion.
Government intervention becomes necessary when self-interest leads to
a. increased profits. b. laissez-faire. c. the undermining of competition. d. the law of diminishing returns.
When economists say the supply of a product has decreased, they mean that
a. the supply curve has shifted to the left. b. the product price has decreased, and as a consequence, suppliers are producing less of the product. c. producers are now willing to sell more of this product at each possible price. d. the supply curve has shifted to the right.
A set of indifference curves on a graph is called
A) a difference map. B) an indifference map. C) a budget map. D) a cluster.