A temporary decrease in the price of oil would be considered a:
A. long-run supply shock.
B. demand shock.
C. short-run supply shock.
D. The changing price of oil would not affect any of these.
Answer: C
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John argues that when the price of a good decreases, people will purchase less of the good. This statement is
A) consistent with the law of demand. B) inconsistent with the law of demand. C) referring to money prices. D) consistent with the law of supply.
If Kami can produce 40 wireless earbuds or 30 cellphones during a month's time, while Sally can produce 10 wireless earbuds or 20 cellphones, then it is correct to state that
A. Sally has a comparative advantage in producing both wireless earbuds and cellphones. B. Kami has a comparative advantage in producing wireless earbuds. C. Kami has a comparative advantage in producing both wireless earbuds and cellphones. D. Sally has an absolute advantage in wireless earbuds.
When a firm retains earnings for investment purposes, it is effectively saving on behalf of its shareholders.
Answer the following statement true (T) or false (F)
If planned investment is ________ to changes in the interest rate, the planned investment schedule is vertical.
A. perfectly responsive B. negatively related C. positively related D. perfectly unresponsive