Suppose the actual and expected price levels in an economy are initially equal. However, the actual price level falls eventually due to a change in economic conditions. Which of the following will occur in the long run?
What will be an ideal response?
The short-run aggregate supply curve will shift to the right.
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A newspaper reports that the average price of new homes in a certain city had decreased, and the number of new homes sold had also decreased. This situation is probably caused by
A. higher government subsidies to new homebuyers in that city. B. a rising population in that city. C. decreasing incomes of people in that city. D. decreasing costs of construction materials and services in that city.
If Molly Bee increases her work hours when her wage increases, then
A) the substitution effect of the wage increase outweighs the income effect. B) the income effect of the wage increase outweighs the substitution effect. C) leisure is an inferior good to Molly. D) Molly is spending beyond her means.
Compare and contrast the principles of utilitarianism, Rawlsianism and egalitarianism. Discuss the assumptions of each and the difficulties societies might face while trying to conform to them.
What will be an ideal response?
Which definition(s) of the money supply include(s) only items that are directly and immediately usable as a medium of exchange?
A. Neither M1 nor M2 B. M2 C. M1 and M2 D. M1