A recession is a decline in:
A. The inflation rate that lasts six months or longer
B. The unemployment rate that lasts six months or longer
C. Real GDP that lasts six months or longer
D. Potential GDP that lasts six months or longer
C. Real GDP that lasts six months or longer
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The supplier of a factor of production has a reservation price of $100. The purchaser of the factor of production has a reservation price of $200. If the factor of production is unique, then:
A. a transaction will occur, and the price paid for the factor of production will be $150. B. a transaction will occur, and the price paid for the factor of production will be $100. C. there will be no transaction since $200 is greater than $100. D. a transaction will occur, and the price paid for the factor of production will be $200.
If an economy's depreciation is greater than its gross investment, then
A) net investment is negative and saving is negative. B) net investment is positive and saving is positive. C) net investment must equal saving. D) the economy's capital stock decreases. E) net investment is positive and saving is negative.
In cities with rent controls, the actual rents paid can be higher than the legal maximum. One explanation for this is
A) rent control laws are so complicated that landlords and tenants may not be aware of what the legal price is. B) landlords are allowed to charge more than the legal maximum on some apartments so long as they charge less on others. C) the legal penalty landlords face for charging more than the legal maximum rent is less than the revenue earned by charging their tenants more than the maximum rent. D) because there is a shortage of apartments, tenants often are willing to pay rents higher than the law allows.
The price of a good will rise when:
a. there is a shortage of the good. b. there is a surplus of the good. c. demand for the good decreases. d. the supply of the good increases.