In a binding situation, changes in government spending do not shift the AD curve.
Answer the following statement true (T) or false (F)
False
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Figure 14.1 represents the market for used bikes. Suppose buyers are willing to pay $200 for a plum (high-quality) used bike and $50 for a lemon (low-quality) used bike. Initially buyers believe that 50% of used bikes in the market are lemons (low quality). Compared to the outcome with neutral expectations, how many fewer bikes are sold in equilibrium?
A. 8 B. 12 C. 18 D. 22
What are the disadvantages of adopting a single currency? Explain
What will be an ideal response?
There is a negative relationship between two variables if
A) neither variable moves. B) they move in the same direction. C) they move in opposite directions. D) one variable changes and the other does not.
Refer to Figure 13-14. Which of the following statements describes the firm depicted in the diagram?
A) The firm is making no economic profit and will exit the industry. B) The firm is in long-run equilibrium and is breaking even. C) The firm is suffering an economic loss by producing at Q0 but will break even if it increases its output to Q1. D) The firm achieves productive efficiency by producing at Q0.