One reason the decline in asset prices just before and during the 2008 recession undermined the health of the economy is that they:
A. raised the trade deficit when foreigners reduced purchases of U.S. assets.
B. led to a contraction in consumer loans because the value of collateral declined.
C. raised the value of the dollar making U.S. goods more expensive to foreigners.
D. undermined consumer and business confidence.
Answer: D
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A) all costs and benefits are taken into account by the transacting parties so the transaction is efficient. B) externalities will lead to market failure. C) the marginal social benefit curve shifts leftward. D) the marginal social cost curve shifts rightward.
Which of the following belongs to the government regulation to control pollution?
A) emissions standard B) emissions fee C) effluent charge D) All of the above
According to Keynesians, an increase in the money supply will have its least impact on GDP and the greatest impact on the price level when the aggregate demand curve intersects
a. the horizontal portion of the aggregate supply curve b. the vertical portion of the aggregate supply curve c. the upward sloping portion of the aggregate supply curve d. either the horizontal or upward sloping portion of the aggregate supply curve e. either the horizontal or upward sloping portion of the aggregate supply curve
Many hotel chains offer senior citizen discounts to members of AARP. This suggests that the hotels believe that senior citizens have a ________ demand for hotel rooms than non-seniors.
A. smaller B. greater C. more elastic D. less elastic