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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In choosing between apartments in two different locations, the marginal commuting cost is given by:
A) the commuting cost from the apartment located closer to the destination. B) the sum of the commuting cost from each apartment to the destination. C) the commuting cost from the apartment located farther away from the destination. D) the difference between the commuting cost from two different apartments to the destination.
The Federal Reserve ________ pay interest on reserves held on deposit. The European System of Central Banks ________ pay interest on reserves held on deposit
A) does; does B) does; does not C) does not; does D) does not; does not
The percentage change in quantity demanded that results from a 1 percent change in price is known as the:
A. cross-price elasticity of demand. B. income elasticity of demand. C. price elasticity of supply. D. price elasticity of demand.
Because every policy change generates winners and losers, loss aversion generates:
A. status quo bias. B. anchoring and adjustment. C. fungibility. D. regression to the mean.