When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease.
B. prices, causing them to definitely rise.
C. output, causing it to definitely increase.
D. prices, causing them to definitely fall.
Answer: A
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Bananas in the European Union often retail for twice more than they do in the U.S. What is the most likely explanation for this fact?
A) A complicated system of tariffs and quotas that the EU has imposed to control the imports of bananas. B) More significant freight costs to ship bananas from Central America. C) Larger markup by European retailers. D) None of the above.
Refer to the above table. What does the marginal revenue product equal when 26 workers are hired a week?
A) $8.50 B) $26 C) $221 D) $1190
The adjustment of nominal incomes to changes in the price level (CPI) is fixed because of the: a. volatility of investment spending
b. existence of long-term contracts. c. complete information possessed by workers. d. all of the above.
If a firm's average cost is declining, setting price equal to marginal cost will
a. maximize the firm's profits. b. minimize the firm's losses. c. guarantee that the firm will lose money. d. help the firm earn the opportunity costs of its resources.