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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What will be an ideal response?
A depreciation of Mexico's currency (the peso) means that
a. Mexico's exports will become more expensive b. it now requires fewer pesos to exchange for one unit of another currency c. Mexico's imports will become less expensive d. it now requires more pesos to exchange for one unit of another currency e. it now requires more of other currencies to exchange for one peso
Which of the following would cause an increase in aggregate demand in the short run?
A. an increase in the supply of money B. a decrease in the price level C. an increase in taxes D. a crop failure
Suppose that in a month the price of pizza increases from $4 to $5. At the same time, the quantity of pizzas demanded decreases from 200 to 190. The price elasticity of demand for pizza (calculated using the midpoint formula) is:
A. zero. B. inelastic. C. unit elastic. D. elastic.