During 2007-2008, the price of gasoline increased from approximately $1.50 to $4.00 per gallon. As a result, the
a. demand for gas guzzling automobiles, such as the Hummer, decreased, causing their price to decline.
b. supply of gas guzzling automobiles decreased, causing their price to increase.
c. demand for gas guzzling automobiles increased, causing their price to increase.
d. supply of gas guzzling automobiles increased causing their price to fall.
a. demand for gas guzzling automobiles, such as the Hummer, decreased, causing their price to decline.
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Refer to the scenario above. What is the difference between the future value of John's deposit and Wendy's deposit after one year?
A) $10 B) $40 C) $60 D) $100
Ethel purchased a bag of groceries in 1970 for $8 . She purchased the same bag of groceries in 2006 for $25 . If the price index was 38.8 in 1970 and the price index was 180 in 2006, then what is the price of the 1970 bag of groceries in 2006 dollars?
a. $5.39 b. $25.00 c. $29.11 d. $37.11
The decision to form a currency union is similar to the decision to peg; however, the currency union requires:
A) a lower level of commitment and therefore requires a lower net benefit. B) a higher level of commitment and therefore requires a higher net benefit. C) more political integration and an agreement to limit trade. D) the loss of political autonomy and is therefore riskier.
Why doesn't GDP change in the long run when the money supply changes?
A. Because in the long run, GDP is determined by the fundamental factors of growth, not the money supply. B. Because the money supply changes only in the short run and then returns to its long-run level. C. Because in the long run, GDP is determined by fiscal policy and not by monetary policy. D. Because in the long run, households adjust their savings to counteract any change in the money supply.