Which of the following is one reason for the decline in aggregate demand that led to the recession of 2007-2009?
A) falling oil prices
B) increases in housing prices
C) the financial crisis
D) a decline in government spending
Answer: C
You might also like to view...
Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
Actual investment spending does not include
A) spending on consumer durable goods. B) spending on new houses. C) spending on new capital equipment. D) changes in inventories.
Two firms compete in a market by selling imperfect substitutes. The demand equations are given by the following equations:
Q1 = 50 - p1 + p2 Q2 = 50 - p2 + p1 For now, assume that each firm has a marginal cost and average cost of 0. a. From the equations, how can you tell these goods are substitutes? How can you tell they are imperfect substitutes? b. Suppose the firms compete by simultaneously choosing price. Find the best response function of each firm as a function of the other firm's price. c. Compute the equilibrium price and quantity for each firm. d. Suppose firm 1 (and only firm 1 ) had a marginal and average cost of $10. How would the equilibrium change? How does this compare to the Bertrand result when the firms sell perfect substitutes?
A floating exchange rate is one that is allowed to move freely between two points that have been determined by an exchange treaty
a. True b. False