When supply and demand for a product decrease simultaneously, we
A) can predict that both equilibrium price and quantity will increase.
B) can predict that both equilibrium price and quantity will decrease.
C) cannot predict equilibrium price, but know that equilibrium quantity will decrease.
D) cannot predict the change in either the equilibrium quantity or equilibrium price.
Answer: C
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If the dollar appreciates, perhaps because of speculation or government policy, then U.S. net exports
a. increase which shifts aggregate demand right. b. increase which shifts aggregate demand left. c. decrease which shifts aggregate demand right. d. decrease which shifts aggregate demand left.
Low-skill workers earn a lower wage than more experienced, higher skilled workers because the
a. low-skill workers were never given the opportunity to invest in human capital. b. low-skill workers lack the intelligence necessary to do any other form of work. c. low-skill workers are too lazy to search for other employment opportunities. d. supply of low-skill workers is large relative to the demand for workers in this skill category.
According to the Kahneman-Tversky value function,
A. small gains should be combined with large gains. B. small gains should be subtracted from large losses. C. small gains should be segregated from large losses. D. small losses should be segregated from large losses.
If actual GDP is $340 billion and there is a positive GDP gap of $20 billion, potential GDP is:
A. $360 billion. B. $660 billion. C. $320 billion. D. $20 billion.