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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The increase in the unemployment rate during a recession is associated with which type of unemployment?
A. Structural unemployment B. Cyclical unemployment C. Nominal unemployment D. Frictional unemployment
During the last decade, the price of shoes rose substantially yet people bought more pairs of new shoes each year. This experience suggests that the
A) supply curve of shoes shifted leftward. B) demand curve for shoes shifted leftward. C) supply curve of shoes shifted rightward. D) demand curve for shoes shifted rightward.
Consider the following statements when answering this question
I. A technology with increasing returns to scale will generate a long-run average cost curve that has economies of scale. II. Diminishing returns determines the slope of the short-run marginal cost curve, whereas returns to scale determine the slope of the long-run marginal cost curve. A) I is true, and II is false. B) I is false, and II is true. C) Both I and II are true. D) Both I and II are false.
By opening up to foreign markets two things countries generally experience are:
A. access to a smaller array of new products and saving money through access to cheaper goods. B. access to a smaller array of new products and increase in negative trade outcomes with that nation. C. saving money through access to cheaper goods and finding new customers for their products. D. increase in negative trade outcomes with that nation and finding customers who generally pay less for their products.