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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An example of the commodity substitution bias in the calculation of the CPI is a price increase in
A) turkey when the price of chicken doesn't rise. B) a GPS unit versus a AAA map book. C) a 2014 Toyota Camry versus a 2005 Honda Civic. D) etexts versus used books bought through Craigslist. E) new homes because people's incomes have increased.
The figure above illustrates aggregate demand and aggregate supply in Sparta. Sparta's price level will rise above 100 if ________
A) government expenditure decreases B) the quantity of money increases C) the quantity of capital increases D) taxes increase
In the long run, a monopolistic competitor will
a. always produce at minimum efficient scale b. produce too little output to achieve minimum cost per unit c. use limit pricing to forestall competition d. earn economic profits e. standardize its product
Currency appreciation benefits importers
Indicate whether the statement is true or false