Recall the Application. Assume that immediately before the housing bubble burst, you purchased a $250,000 home and took out a $225,000 mortgage to make the purchase. When the bubble burst, the value of your home fell by 20 percent
The value of the home is now ________ and you owe the mortgage company ________.
A) $180,000; $225,000 B) $200,000; $180,000 C) $200,000; $225,000 D) $180,000; $200,000
C
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Stabilization of business cycle fluctuations focuses on the long run
Indicate whether the statement is true or false
Which elasticity measures producers' responsiveness to a change in price?
A. Price elasticity of demand B. Cross-price elasticity C. Price elasticity of supply D. Income elasticity of supply
Which statement is correct?
A. During a recession spending on capital goods increases. B. The production of nondurable consumer goods is more stable than the production of durable consumer goods over the business cycle. C. Recessions have not been severe because economists and statisticians have been able to predict their occurrence and intensity with high accuracy. D. Real output and employment usually show little variance over the business cycle.
Use the above table. If firms 3 and 4 merge, the four-firm concentration ratio will
A. increase from 60 percent to 75 percent. B. decrease from 75 percent to 60 percent. C. increase from 75 percent to 80 percent. D. not change.