As a result of the housing market crash overall output fell, and prices:
A. decreased because the magnitude of shift was smaller for aggregate demand than it was for aggregate supply.
B. increased because the magnitude of shift was smaller for aggregate demand than it was for aggregate supply.
C. increased because the magnitude of shift was larger for aggregate demand than it was for aggregate supply.
D. decreased because the magnitude of shift was larger for aggregate demand than it was for aggregate supply.
Answer: D
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The self-correcting property of the economy means that output gaps are eventually eliminated by:
A. increasing or decreasing potential output. B. government policy. C. decreasing inflation only. D. increasing or decreasing inflation.
Whenever two individuals trade with each other, one will benefit and the other will lose.
Answer the following statement true (T) or false (F)
Refer to Scenario 9.1. The Nash equilibrium occurs when Sheb places ________ sheep on the commons and Monty places ________ sheep on the commons
A) 4; 4 B) 4; 5 C) 5; 4 D) 5; 5
Mountain Water is a natural monopoly. The government decides to regulate Mountain Water by imposing a marginal cost pricing rule. The figure above shows the demand for Mountain Water. Marginal cost is $0.20 per bottle
The price of a bottle of Mountain Water is ________, and ________ thousand bottles are sold per month. A) $0.20; 400 B) $0.50; 250 C) $0.20; 500 D) $1.00; 500