What would be the impact of a virus that infected the Midwestern corn crop?
a. Price of corn increases and the price of wheat decreases
b. Price of corn decreases and the quantity of wheat increases
c. Quantities of corn and wheat increase
d. Quantity of corn decreases and the price of wheat increases
d. Quantity of corn decreases and the price of wheat increases.
Corn Market: The virus is represented by a shift back in the supply curve, which increases the price and decreases the quantity of corn - rule out answers b and c. Wheat Market: Because corn and wheat are substitutes, the increase in the price of corn would shift the demand for wheat out (people substitute from corn to wheat). An increase in demand for wheat would increase both the quantity and price of wheat.
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A bank has $2 million in checkable deposits. In the bank's balance sheet, this would be part of
A. liabilities. B. net worth. C. capital stock. D. assets.
For any competitive labor market, what change would have to occur to cause the labor supply to increase and shift the supply curve right?
A. Number of firms increases B. Opportunity cost of work decreases C. Number of workers decreases D. Opportunity cost of work increases
Starting from a position of macroeconomic equilibrium at the full-employment level of real GDP, in the short run an unanticipated increase in the money supply will
a. raise real interest rates, lower prices, and reduce real GDP. b. raise real interest rates, lower prices, and leave real GDP unchanged. c. raise nominal interest rates, lower prices, and leave real GDP unchanged. d. lower real interest rates, raise prices, and increase real GDP.
A decrease in stock prices alters the consumption function by:
A. decreasing the vertical intercept. B. decreasing the slope. C. increasing the vertical intercept. D. increasing the slope.