If home prices are falling, consumers purchasing a home will find their purchasing power of money has increased. This benefit to consumers is called the
A) home equity effect. B) inflation effect. C) wealth effect. D) multiplier effect.
C
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When a monopolistically competitive firm lowers its price, one good thing happens to the firm. What is this "one good thing" called?
A) the income effect B) the price effect C) the substitution effect D) the output effect
The economy's self-correcting mechanism is such that demand shocks are offset in the long run by shifts of aggregate supply and supply shocks are offset by shifts of aggregate demand
a. True b. False
In August 2005, hurricane Katrina hit the Gulf States damaging approximately 20 percent of our oil refining capacity. This event
a. resulted in a massive building of new refining capacity which shifted the supply curve of gasoline to the left b. shifted the supply curve of gasoline to the left thereby raising its price c. shifted the demand curve of gasoline to the right because less gasoline was available d. resulted in an inward shift in both the supply curve of gasoline and the demand curve for gasoline because less gasoline was available and, as a result, there was less demand for gasoline e. resulted in an outward shift in both the supply curve of gasoline and the demand curve for gasoline because less gasoline was available and, as a result, there was less demand for gasoline
Assume that a country imposes a tariff in order to gain a price advantage on an item. What is the typical response from the exporting country?
a. It accepts the situation, and does nothing about it. b. It seeks greater efficiency in order to offset the tariff. c. It refuses to sell to the country that imposes the tariff. d. It retaliates by imposing tariffs or quotas on items from the other country.