In events leading to the collapse of the housing bubble, inflated home values caused consumers to:
A. save less and spend more.
B. spend less and save more.
C. spend more on homes and less on all other goods.
D. hold their savings to equity in their homes and stop saving more liquid forms of assets.
A. save less and spend more.
You might also like to view...
GDP calculations tend to exclude all of the following EXCEPT
A) environmental quality. B) salaries paid to government employees. C) illegal transactions. D) work that people do for themselves in their own homes.
In 2008, consumers were mailed a stimulus check in response to the recession. The result showed that Ricardian equivalence:
A. failed to hold, as most people spent a substantial share of the money. B. failed to hold, as most people saved the money. C. held, as most people saved the money. D. held, as most people spent a substantial share of the money.
If AD and AS increase at exactly the same rate, the result will be
A. demand-side inflation. B. supply-side inflation. C. falling prices. D. stable prices.
Economic rent is
a. the same thing as economic profit b. the difference between accounting profit and economic profit c. the amount a firm pays to lease its factory or machinery d. any earnings in excess of the minimum needed for a good or service to be produced e. any earnings in excess of the maximum necessary for a good or service to be produced