Give an example not in the text of how quantity can become indeterminate.
What will be an ideal response?
Should show a thorough understanding of how a change in both supply and demand can cause quantity to become indeterminate. For example, suppose the weather service predicts a La Niña pattern will cause heavy snowfall in major ski resort areas. As a result, the manufacturer increases the production of skis, thereby increasing supply. However, unexpectedly, the temperatures rise and melt much of the snow, and afterward, snowfall totals remain low. The demand for skis plummets. In such a situation, the increase in supply and decrease in demand will cause the price of skis to drop. However, the quantity of skis will be indeterminate. If supply increases more than demand decreases, then the equilibrium quantity will increase. If demand decreases more than supply increases, then the equilibrium quantity will decrease.
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Anything owed by a person or a firm is
A) wealth. B) a liability. C) an asset. D) owner's yield.
Which of the following statements is TRUE?
A) consumption + saving = disposable income B) consumption + saving = personal income C) consumption - investment = disposable income D) consumption - saving = personal income
Which of the following is not a benefit to lenders of financial intermediation?
a. Higher liquidity than the direct market. b. Lower credit risks than the direct market. c. Lower liquidity risk than the direct market. d. Lower market risk than the direct market. e. All the above are benefits.
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.