Which of these demonstrates a negative real shock causing a negative demand shock?
A. Fear among businesses causes them to lay off workers, who eventually return to work at lower wages.
B. Bad news, like rising oil prices, causes investors to make more new investments, seeking greater profit opportunities.
C. Bad news, like rising oil prices, causes people to become pessimistic and to cut back on their spending.
D. Fear among businesses causes them to lay off workers, who lose their skills and become permanently less productive.
Ans: C. Bad news, like rising oil prices, causes people to become pessimistic and to cut back on their spending.
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A recession can best be defined as a period of time in which
A. total output of the economy falls. B. total output of the economy rises very slowly. C. total unemployment falls. D. total international trade fails to rise. E. the rate of inflation falls below zero.
Suppose a medical study reveals new benefits to consuming beef and at the same time a bumper corn crop reduces the cost of feeding steers. The equilibrium quantity of beef will
A) decrease. B) perhaps increase, decrease, or stay the same, but more information is needed to determine which it does. C) stay the same. D) increase. E) definitely either stay the same or decrease.
If a company's total costs per day increase from $200 to $400 by adding another worker, but its additional benefits are $300, it is sensible to add that additional worker.
Answer the following statement true (T) or false (F)
What are the economic effects of a depreciation of the dollar on foreign exchange markets?
What will be an ideal response?