The overall behavior of the economy: A. is remarkably stable over time. A. & Demand shocks occur with greater frequency. This suggests that ramen noodles and boxed macaroni and cheese are: During the last few decades in the United States, health officials have argued that eating too much beef might be harmful to human health. 16. 5. Which of the following results from firms holding inventories? C. build up inventories before reducing production. B. most firms have agreements with each other to fix prices at profit-maximizing levels. inventories. Firms can maintain production levels and adjust inventories in response to demand shocks. If an economy wants to increase its current level of investment, it must: A. sacrifice future consumption. C. monopoly power of corporations, and small business profitability. If X is an inferior good, an increase in money income will shift the: If a surplus exists in a market, we know that the actual price is. build up inventories before reducing production. Prices tend to be sticky because: A. firms are worried that frequent price changes would annoy consumers. 47. Which of the following best explains why prices tend to be inflexible even when demand changes? D. why specific businesses fail. In situations of sticky prices and negative demand shocks we would expect firms to: build up inventories before reducing production. B. print more money. The negative relationship between price and quantity demanded: Which of the following events would result in a reduction in equilibrium quantity and an ambiguous change in equilibrium price? Modern economic growth refers to countries that have experienced an increase in: A. real GDP over time. D. oil prices and housing markets. B. reduce production before building up inventories. D. is only possible if the economy is experiencing positive growth in real GDP. B. differs over time as prices become increasingly flexible in the months and years following a shock. In situations of sticky prices and negative demand shocks we would expect firms to: A. deplete inventories before increasing production. For which of the following goods or services are prices most sticky? B. only the largest industries in the economy. C. nominal GDP, unemployment, and inflation. The supply curve shows the relationship between: Suppose the number of buyers in a market rises and a technological advancement occurs at the same time. Which of the following events would most likely result in lower employment? | Situations in which firms expect one thing to happen but then something else happens are called: A. Recessions B. Shocks C. Business cycles D. Fluctuations AACSB: Analytic Blooms: Level 1 Remember Difficulty: 1 Easy Learning Objective: 06-05 Describe why economists believe that "shocks" and "sticky prices" are responsible for short-run fluctuations in output and employment. View desktop site. 6. reduce production before building up inventories. 16. D. Firms can maintain production levels and adjust inventories in response to demand shocks. In situations of sticky prices and negative demand shocks, we would expect firms to build up inventories before reducing production There is a trade-off between 14. D. lower prices before reducing production or … 17. Real GDP is preferred to nominal GDP as a measure of economic performance because: A. nominal GDP uses current prices and thus may over- or understate true changes in output. C. the economy as a whole. C. government controls most prices. The two topics of primary concern in macroeconomics are: When economists refer to "investment," they are describing a situation where: Which of the following is an example of a supply shock? In situations of sticky prices and negative demand shocks, we would expect firms to: Multiple Choice. B. unemployment, and wage rates in labor markets. B. C. most economies realized high rates of growth in output per person. B. deplete inventories before increasing production. 18. The economy is much more susceptible to business cycle fluctuations. B. comes at the expense of reduced current consumption. In situations of sticky prices and negative demand shocks we would expect firms to: A. build up inventories before reducing production. A reduction in the price of digital cameras will: An improvement in production technology will: College students living off-campus frequently consume large amounts of ramen noodles and boxed macaroni and cheese. B. comes at the expense of reduced current consumption. 19. NEW! lower prices before reducing production or building up inventories. 20. deplete … When constructing a demand curve for product X: In 2007, the price of oil increased, which in turn caused the price of natural gas to rise. When they finish school and start careers, their consumption of both goods frequently declines. c. investment spending will fall. C. Demand shocks occur less frequently. build up inventories before reducing production. would expect firms to: lower prices before reducing production or building up D. lower prices before … The law of supply indicates that, other things equal: Other things equal, if the price of a key resource used to produce product X rises, the: If an economy wants to increase its current level of investment, it must: Refer to the figures below. 3. In situations of sticky prices and negative demand shocks we would expect firms to: A. deplete inventories before increasing production. As a result of this information, today's demand curve for Mustangs. C. differs over time as prices become increasingly sticky in the months and years following a shock. A. short-run fluctuations in output and employment, and long-run economic growth. B. determined in a highly competitive market. A. real GDP, inflation, and unemployment. 9. C. whenever government implements fiscal or monetary policy. A. Which figure(s) represent a situation where prices are flexible? D. real output per person. reduce production before building up inventories. In situations of sticky prices and negative demand shocks, we would expect firms to: 73. C. relatively sticky. Shocks to the economy occur when: A. stock prices rise by more than 10 percent per year. 7. b. reduce production before building up inventories. D. lower prices before reducing production or building up inventories. A price of $60 in this market will result in: Two goods are complements if a decrease in the price of one good. C. prices are flexible. D. actual economic events do not match what people expected. D. output and population growth were stagnant. Privacy In situations of sticky prices and negative demand shocks we would expect firms to: a. deplete inventories before increasing production. Shocks to the economy occur: A. when expectations are unmet. B. nominal GDP only includes goods and excludes services. As a result, there has been a significant decrease in the amount of beef produced. Which of the following best explains the decrease in production? 1. Before the period of modern economic growth: A. only civilizations such as the Roman Empire experienced economic growth. In situations of sticky prices and negative demand shocks, we would expect firms to A. deplete inventories before increasing production. Refer to the diagram below. D. because most economic behavior is unpredictable. C. increase production before building up inventories. Taxi fares B. Haircuts C. Coin-operated laundry machines D. Airlines tickets. The two topics of primary concern in macroeconomics are: A. short-run fluctuations in output and employment, and long-run economic growth. 74. A. nominal GDP uses current prices and thus may over- or understate true changes in output.

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