When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease.
B. prices, causing them to definitely rise.
C. output, causing it to definitely increase.
D. prices, causing them to definitely fall.
Answer: A
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The short-run supply curve of a perfectly competitive firm is based primarily on its
A. MC curve. B. AVC curve. C. AFC curve. D. ATC curve.
The notion of opportunity cost allows the measurement of tradeoffs
Indicate whether the statement is true or false
What happens as interest rates fall?
A) The number of profitable investment opportunities declines. B) The opportunity cost of using retained earnings to finance investment spending declines. C) Planned investment spending also falls. D) Planned investment spending remains constant since it depends on profit projections not interest rates.
If the elasticity of supply for a good is greater than the government expected: a. Consumers will bear more of the burden of the tax than the government expected. b. Producers will bear more of the burden of the tax than the government expected. c. The tax will raise more revenue than the government expected
d. Both a. and c. are true.