The bursting U.S. housing bubble of 2007 did not trigger an immediate recession, because
A. mortgage interest rates remained relatively low.
B. Democrats in control of Congress passed new tax cuts for distressed homeowners.
C. previous homeowners were able to move into apartments.
D. all of the options are correct.
Answer: A
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Most economists believe that the CPI overstates the actual changes in prices while the chain index for GDP understates them
Indicate whether the statement is true or false
Which of the following will cause the average cost curve of making cigarettes to shift?
A) a $5 million penalty charged to each cigarette maker B) a $1 per pack tax on cigarettes C) a $1 an hour wage increase paid to all cigarette production workers D) All of the above
Refer to Figure 16.3. A shift from AS3 to AS2 could be caused by
A. A decrease in the money supply. B. An increase in the marginal tax rate. C. An increase in the investment in human capital. D. A decrease in government spending.
Which of the following statements about markets and prices is correct?
A. In a market system, buyers and sellers must be in face-to-face contact with each other B. Prices affect the distribution of goods in a market system but not the allocation of resources C. In a market system, prices serve to ration goods and services to consumers D. The operation of a market system has little, if any, effect on the distribution of income in the economy