During an economic expansion, housing and stock prices generally
a. fall, leading to a reduction in aggregate demand.
b. fall, leading to an increase in aggregate demand.
c. rise, leading to a reduction in aggregate demand.
d. rise, leading to an increase in aggregate demand.
D
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According to the Application, as new products are constantly invented and introduced on the market,
A) the bias in the CPI can be large. B) the bias in the CPI will eventually disappear. C) the bias in the CPI will remain virtually unchanged. D) the bias in the CPI tends to become smaller.
A firm’s fixed cost
A. does not vary with output. B. does not change between the short run and the long run. C. is generally a higher percentage of its total cost at high output quantities than at low output quantities. D. All of the above are true.
Profits and losses play an important role in helping
a. to signal to government which businesses are suffering losses so that they can be subsidized. b. consumers decide which products they value the most by looking at each firm's profit. c. to allocate scarce resources in a manner that maximizes the value created to society. d. ensure that the total profits in the economy exactly equal the total losses.
The opportunity cost of going to college is
a. the total spent on food, clothing, books, transportation, tuition, lodging, and other expenses. b. the value of the best opportunity a student gives up to attend college. c. zero for students who are fortunate enough to have all of their college expenses paid by someone else. d. zero, since a college education will allow a student to earn a larger income after graduation.