Before it went bankrupt in 2008, Lehman Brothers investment bank had a leverage ratio of 30 which meant it was:
A. highly hedged.
B. in debt more than it was worth.
C. highly leveraged.
D. not very leveraged.
C. highly leveraged.
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The aggregate expenditure model predicts a business cycle expansion occurs when
A) the aggregate planned expenditure curve shifts downward. B) aggregate supply increases. C) induced expenditure decreases. D) autonomous expenditure increases. E) potential GDP increases.
The figure above shows supply curves for soft drinks. Suppose the economy is at point a. A decrease in the price of sugar used to make soft drinks is shown as a movement from point a to a point such as
A) none of the points that are illustrated. B) point b. C) point c. D) point d.
Suppose Smith wants one iPhone no matter what the price is between $0 and $350, Jones wants one iPhone no matter what the price is between $0 and $200, and Griffith wants one iPhone no matter what the price is between $0 and $450. In this case, each individual buyer's demand curve will be __________________ and the market demand curve will be __________________
A) downward sloping; vertical B) vertical; downward sloping C) vertical; vertical D) downward sloping; downward sloping
How will an unanticipated decrease in aggregate demand influence equilibrium output in the goods and services market?
What will be an ideal response?