In the long run, a decrease in aggregate demand, all other things unchanged, will cause the price level to _______ and potential output to _______ .
A. decrease; decrease
B. increase; remain stable
C. decrease; remain stable
D. increase; increase
Ans: C. decrease; remain stable
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Refer to Figure 2-6. If the economy is currently producing at point A, what is the opportunity cost of moving to point B?
A) 6 thousand hammers B) 30 thousand wrenches C) 23 thousand hammers D) 8 thousand wrenches
Which of the following most clearly illustrates the concept of derived demand?
a. An increase in the price of steak causes the demand for poultry to increase. b. An increase in the demand for new houses leads to an increase in the demand for construction workers. c. An increase in consumer income leads to an increase in the demand for services provided by the government. d. An increase in the demand for new cars causes the demand for used automobiles to rise.
A market in which there are neither external benefits nor external costs is:
A. efficient. B. inefficient. C. efficient and equitable. D. impossible.
What three factors led to the mortgage default crisis?
What will be an ideal response?