If the quantity of housing supplied in a community is less than the quantity of houses demanded, the existing price:
A) will remain unchanged.
B) will fall to clear the market.
C) will either fall or remain unchanged.
D) is below the market equilibrium price.
Ans: D) is below the market equilibrium price.
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An economy has two workers, Paula and Ricardo. Everyday they work, Paula can produce 4 computers or 16 shirts, and Ricardo can produce 6 computers or 12 shirts. What is the most of each good that can be produced each day if each worker fully specializes according to his/her comparative advantage?
A. 8 computers and 22 shirts B. 5 computers and 14 shirts C. 4 computers and 12 shirts. D. 6 computers and 16 shirts
The key factor leading to the financial crises in Mexico and the East Asian countries was
A) a deterioration in banks' balance sheets because of increasing loan losses. B) severe fiscal imbalances. C) a sharp increase in the stock market. D) a sharp decline in interest rates.
One of the shortcomings of the activist approach is the difficulty in correctly identifying the economy's potential output level and the natural rate of unemployment
Indicate whether the statement is true or false
How long do most business cycles last?
A. Two full years B. Two consecutive quarters C. At least 10 years D. Varying lengths of time