Which of the following typically rises during a recession?
a. investment.
b. unemployment.
c. tax revenues.
d. new home construction.
b
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One purpose of interest-rate ceilings was to: a. establish a ceiling on bank profits
b. establish a floor on bank profits. c. encourage competition in other areas. d. eliminate the need for the FDIC. e. reduce the chance of bank failures.
Suppose that quantity demand rises by 10% as a result of a 15% decrease in price. The price elasticity of demand for this good is
a. inelastic and equal to 0.67. b. elastic and equal to 0.67. c. inelastic and equal to 1.50. d. elastic and equal to 1.50.
Total producer surplus in a market is measured as the
A. area bounded above the market clearing price and beneath the market demand curve. B. vertical distance from the horizontal (quantity) axis to the market clearing price. C. area bounded below the market clearing price and above the market supply curve. D. horizontal distance from the vertical (price) axis to the equilibrium quantity.
Suppose 1000 units of a good are sold at $10 a unit. If its price increases to $20 and total revenue increases to $20,000 and increases by $1000 for every dollar increase in price after that, we know that
A. demand is perfectly elastic. B. the demand curve is vertical. C. the demand curve is a rectangular hyperbola. D. the demand curve is downward sloping and the firm is on the inelastic portion of the demand curve.