How do mainstream economists explain the cause of the financial crisis that led to the severe recession of 2007–2008?
What will be an ideal response?
Mainstream economists see the cause of the recession as coming from a decline in aggregate demand. The financial crisis resulting from the bursting of the housing bubble led to a fall in investment spending and consumer spending, which are two forces that support aggregate demand. Business inventories increased and businesses further curtailed investment spending as the economy fell into recession. Unemployment rose and incomes fell, leading more consumers to cut their spending.
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What are the two components of federal spending?
What will be an ideal response?
A country is most likely to have a comparative advantage in the production of cars if:
A. it has strict environmental protection laws governing automobile emissions. B. its citizens prefer driving cars to other forms of transportation. C. it imports most of the raw materials necessary to produce cars. D. it has a relative abundance in the natural resources needed to produce cars.
Which of the following examples is characteristic of a perfectly competitive market?
a. The green beans grown in Oregon have a higher market price than the ones grown in California. b. Some of the green beans grown in Oregon are better than the ones grown in California. c. All the green beans grown in Oregon are better than the ones grown in California. d. The green beans grown in Oregon have the same quality as the ones grown in California.
The Motor Carrier Act of 1980 removed the government's restriction on:
A. entry into the trucking industry. B. the size of trucks used to transport goods and services. C. entry into the industry that produces delivery trucks. D. entry into parcel delivery.