When the housing bubble popped, the effect of the negative demand side shock and the negative supply side shock were the same on:
A. output, causing it to definitely decrease.
B. prices, causing them to definitely rise.
C. output, causing it to definitely increase.
D. prices, causing them to definitely fall.
Answer: A
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If society is experiencing a net social cost from the production of a good, this implies that
A. the socially optimal level of output is being produced and society is willing to accept the costs that result. B. producers would rather produce the output at which marginal social cost equals the demand for the good. C. negative externalities are involved in the production of this good. D. none of the above
Economics examines the options open to households, business firms, governments, and entire societies by the limited resources at their command
a. True b. False Indicate whether the statement is true or false
If a person is going to pay $500 per month every month for 5 years, what do you know about their car loan (if the interest rate is positive)?
A. The loan amount was exactly $30,000. B. The loan amount was less than $30,000. C. The loan amount was more than $30,000. D. Nothing.
Suppose the U.S. economy is operating at potential output. A negative supply shock that is accommodated by an open market purchase by the Federal Reserve will cause ________ in real GDP in the long run and ________ in inflation in the long run, everything else held constant.
A) no change; an increase B) no change; a decrease C) an increase; an increase D) a decrease; a decrease