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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Quinn's income to spend each month on two normal goods, bowling or eating out, is $100. It costs $10 to bowl for the night, and it costs $20 for Quinn to eat at a restaurant. Quinn currently consumes four nights of bowling and three meals at a restaurant. If the price of bowling increased to $15, the income effect would predict:
A. Quinn would consume more of each good. B. Quinn would consume less of each good. C. Quinn would consume more bowling and less meals out. D. Quinn would consume less bowling and more meals out.
Once active discrimination ends, it:
A. no longer affects people or markets. B. is quickly forgotten, and efficiency is reached. C. can have long-lasting effects on people and markets. D. None of these is true.
One consequence of an increase in government spending is that
a. autonomous consumption will increase b. autonomous consumption and investment spending will decrease c. the increase in GDP will equal the size of the amount of spending d. autonomous consumption and investment spending will increase e. investment spending will increase
A likely example of substitute goods for most people would be
a. tables and chairs. b. bicycles and helmets. c. apple juice and orange juice. d. coffee and sugar.