Why do the owners of good-quality used cars stay away from the market for used cars?
What will be an ideal response?
Only the owners of used cars know about the true quality of their cars, but buyers do not. Therefore, buyers are often not willing to pay a high price for used cars, thinking that the car they buy might be a lemon. As a result, it becomes unprofitable for owners of good-quality cars to sell their cars.
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Everything else equal, a decrease in the supply of dollars in exchange for pesos:
A) will cause the dollars to depreciate against the pesos and will decrease the quantity of dollars being traded in the foreign exchange market. B) will cause the dollars to appreciate against the pesos and will increase the quantity of dollars being traded in the foreign exchange market. C) will cause the dollars to depreciate against the pesos and will increase the quantity of dollars being traded in the foreign exchange market. D) will cause the dollars to appreciate against the pesos and will decrease the quantity of dollars being traded in the foreign exchange market.
Buying a house during a recession may be a good idea if your job seems secure because the Federal Reserve often lowers interest rates during a recession
Indicate whether the statement is true or false
Temporary changes in the price level caused by changes in the business cycle are called:
A. demand pull inflation. B. cost push inflation. C. demand push inflation. D. cost pull inflation.
What happens to quantity supplied when the price is raised?
A. It rises B. It falls C. It stays the same D. It cannot be determined if it rises, falls, or stays the same