As the housing bubble collapsed, the combination of increasing interest rates and pessimism about future economic prospects:
A. increased both consumption and investment spending.
B. decreased consumption and increased investment spending.
C. decreased both consumption and investment spending.
D. increased consumption and decreased investment spending.
C. decreased both consumption and investment spending.
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According to your authors, the "boom" phase of the so-called "business cycle" is
A) caused by an expansionary increase of the money supply. B) a systematic accumulation of mistakes among businesses and households across the economy. C) undertaken because business planners miscalculate the expected profitability of their new ventures. D) ultimately followed by a recessionary "bust" as people begin to correct for the mistakes they've made during the boom phase of the cycle. E) described correctly by all of the above statements.
Long-run economic profits are possible in which of the following market structures?
A. Monopolistic competition B. Oligopoly and monopoly C. Perfect competition D. Only monopoly
You own a building that has four possible uses: a cafe, a craft store, a hardware store, and a bookstore. The value of the building in each use is $2,000; $3,000; $4,000; and $5,000, respectively. You decide to open a hardware store. The opportunity cost of using this building for a hardware store is
A. $5,000, the value if you rented the building to someone else to use as a bookstore. B. $10,000, the sum of the values if the building is used for a cafe, a craft store, or a bookstore. C. $2,000, the value if the building is used as a cafe. D. $3,000, the value if the building is used as a craft store.
A monopolistically competitive firm maximizes profits in the short run and long run at an output level where marginal revenue equals marginal costs.
Answer the following statement true (T) or false (F)