Assume the market in the graph shown was originally at an equilibrium with demand D and supply S. Suppose Demand shifts and becomes D2. What might have caused such a shift?
A. People expect the price of this good to drop in the near future.
B. The good became more popular.
C. The good became cheaper to produce.
D. Substitutes for this good became less expensive.
Answer: B
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If lenders anticipate no changes in liquidity, information costs, and tax differences, the yield on a risky security should be
A) greater than that on a safe security and the price of a risky security should also be greater than that of a safe security. B) less than that on a safe security and the price of a risky security should also be less than that of a safe security. C) greater than that on a safe security and the price of a risky security should be lower than that of a safe security. D) less than that on a safe security and the price of a risky security should be greater than that on a safe security.
Income mobility studies suggest that poverty
a. cannot be alleviated by privately sponsored anti-poverty programs. b. cannot be alleviated by government sponsored anti-poverty programs. c. is a long-term problem for a relatively large number of families. d. is not a long-term problem for most families.
Suppose we observe the price level increasing and real GDP decreasing. An explanation for this is that
A. the dollar strengthened and the effect on aggregate supply was less than the effect on aggregate demand. B. the dollar weakened and the effect on aggregate supply was less than the effect on aggregate demand. C. the dollar strengthened and the effect on aggregate supply was greater than the effect on aggregate demand. D. the dollar weakened and the effect on aggregate supply was greater than the effect on aggregate demand.
Suppose a jar of DeLux popcorn that is ultimately sold to a customer at Friendly Groceries is produced by the following production process: Name of CompanyRevenuesCost of Purchased inputsFulton Family Farm$0.500DeLux Popcorn Co.$2.50$.50Friendly Groceries$4.00$2.50If the corn was grown and the jar of popcorn produced in the year 2015, but the jar was sold at Friendly Groceries in the year 2016, what is the contribution of these transactions to GDP in the year 2015?
A. $3.00 B. $0.50 C. $2.50 D. $2.00