The housing shock which occurred during the recession of 2007-2009 reduced wealth and residential construction, causing the
A) IS curve to shift to the right.
B) IS curve to shift to the left.
C) MP curve to shift up.
D) MP curve to shift down.
B
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An increase in money supply causes the real interest rate to ________ and output to ________ in the short run, before prices adjust to restore equilibrium
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
If the demand curve is given by Q = a + bp, then b is
A) positive. B) the quantity demanded when price is zero. C) the change in quantity demanded if price changes by 1. D) different at different points on the demand curve.
Sadie just bought a new karaoke machine to replace her old one. Her old one works perfectly fine and would sell on Craigslist for $50. The fact that Sadie would not pay $50 for it, yet continues to let it sit in her closet unused is explained by:
A. the implicit cost of ownership. B. the cost of admitting she likes karaoke. C. ignored sunk costs. D. irrationally considering sunk costs.
If the price of inputs rises and personal income taxes rise:
a. Price index rises, and the change in real GDP is uncertain. b. Price index falls, and real GDP rises. c. Price index falls, and real GDP falls. d. Price index falls, and the change in real GDP is uncertain. e. The change in price index is uncertain, and real GDP falls.