Why is deflation such a problem for consumption and investment?
A. It increases the rate of both.
B. It slows both.
C. It slows investment while simultaneously increases consumption.
D. It causes firms and households to spend more.
B. It slows both.
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The marginal product of labor is
A) total product divided by labor. B) the change in total product divided by the increase in labor. C) a measure of labor. D) output that does not meet quality specifications. E) total product minus the quantity of labor.
The layoff of workers in virtually all industries during the 1982 recession is an example of the classification of workers as
A) voluntarily unemployed. B) structurally unemployed. C) cyclically unemployed. D) frictionally unemployed.
If demand for a given good is perfectly elastic, it follows that
a. as price changes, quantity demanded does not change. b. as price changes, quantity demanded changes by a larger percentage. c. as price changes only a small percentage, quantity demanded falls to zero. d. as income changes only a small percentage, quantity demanded changes by a very large percentage. e. none of the above
Subprime borrowers ________
A) are those individuals who owe more on their mortgage than the value of their home B) possess a relatively low FICO score C) rely on mortgage-backed securities to support their mortgage applications D) are those with an income level below the value of their mortgage