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
You might also like to view...
Which of the following is the most important advantage of using money rather than relying exclusively on barter?
A) The use of money encourages people to diversify and learn to do more things for themselves. B) The use of money encourages people who want to exchange to become more closely acquainted. C) The use of money lowers the cost of locating people with whom to exchange. D) The use of money reduces opportunities for fraud and theft. E) The use of money reduces selfishness because money in itself has no value.
An innovation that blurred the distinction between brokerage firms and commercial banks was Merrill Lynch's development in 1977 of the
A) cash management account. B) money market mutual fund. C) individual retirement account. D) discount brokerage.
Suppose there is currently a surplus of wheat on the world market. The problem of excess supply may be removed from the market by:
A) lowering the market price. B) shifting the supply curve leftward. C) shifting the demand curve leftward. D) Both A and B are plausible actions.
Which of the following is the largest component of federal spending today?
A) income security B) Social Security C) Medicare D) national defense