When housing prices fall, as they did beginning in 2006 following the housing market bubble, consumption spending on furniture, appliances, and home improvements ________ as many households found it ________ to borrow against the value of their homes
A) declined; easier
B) declined; harder
C) increased; easier
D) increased; harder
Answer: B
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The theory of PPP suggests that if one country's price level falls relative to another's, its currency should
A) depreciate. B) appreciate. C) float. D) do none of the above.
If two goods are substitutes, then
A) an increase in the price of one causes the demand for the other to fall. B) there is an inverse relationship between changes in the price of one good and changes in the demand for the other. C) if the price of one good falls, the demand for the other good falls also. D) changes in the quantity demanded of one good will not affect the demand for the other.
Economists use the term "marginal" to describe costs and benefits
a. that are minimal and hardly worth noting. b. that are incremental and thus relevant to decision making. c. that are noteworthy but not the most important. d. whose importance can be minimized through hard work. e. none of the above.
The newest school of economic thought to emerge are _________.
A. the economic behaviorists B. supply side economists C. the new classical economists D. monetarists