Economic bubbles are created because of inflated (and in the short-term self-fulfilling) expectations of
A. earnings.
B. overall economic growth.
C. future-asset prices.
D. interest rates.
Answer: C
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As a firm increases its output, its average total cost decreases. This is an outcome of:
A) the Law of Demand. B) economies of scale. C) diseconomies of scale. D) the Law of Diminishing Returns.
The Fed's two main monetary policy targets are
A) the interest rate and real GDP. B) the money supply and the interest rate. C) the money supply and the inflation rate. D) the inflation rate and real GDP.
Which of the following could not cause an increase in both the equilibrium price and quantity of a good exchanged? a. Increased input prices
b. Decreased incomes for an inferior good. c. An increase in the price of a substitute good. d. Increased tastes for the good.
If the value of the price elasticity of demand is 0.2, this means that
a. a 20 percent decrease in price causes a 1 percent increase in quantity demanded b. a 0.2 percent decrease in price causes a 1 percent increase in quantity demanded c. a 5 percent decrease in price causes a 1 percent increase in quantity demanded d. a 0.2 percent decrease in price causes a 0.2 percent increase in quantity demanded e. a 100 percent decrease in price causes a 200 percent increase in quantity demanded