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in situations of sticky prices and negative demand shocks, we would expect firms to

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. D. real output per person. | What would we expect to happen in the market? 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. C. offer more stocks and bonds to financial investors. Shocks to the economy occur when: A. stock prices rise by more than 10 percent per year. C. can only occur if the government increases the amount of money in circulation. 16. As a result of this information, today's demand curve for Mustangs. firms may be reluctant to change prices for fear of seeing off a price war or losing customers to rivals In situations of sticky prices and negative demand shocks we would expect firms to: build up inventories before reducing production Which of the following would an investor consider to be an investment? B. nominal GDP only includes goods and excludes services. D. why specific businesses fail. 6. Prices tend to be sticky because: A. firms are worried that frequent price changes would annoy consumers. The economy is much more susceptible to business cycle fluctuations. The overall behavior of the economy: A. is remarkably stable over time. B. real GDP, nominal GDP, and inflation. d. the actual unemployment rate will be higher than the natural unemployment rate. The three statistics that are the main focus for those measuring macroeconomic health are: A. real GDP, inflation, and unemployment. 13. D. oil prices and housing markets. C. the economy as a whole. B. government takes a more active role in the economy. reduce production before building up inventories. c. investment spending will fall. C. nominal GDP is not adjusted for population changes. D. because most economic behavior is unpredictable. A. nominal GDP uses current prices and thus may over- or understate true changes in output. This can best be explained by saying that oil and natural gas are: Which of the following statements is correct? This would suggest that airline ticket prices are: A. stuck. inventories. A. Which of the following is used to measure directly the average standard of living across countries. A. real GDP, inflation, and unemployment. lower prices before reducing production or building up inventories. Before the period of modern economic growth: A. only civilizations such as the Roman Empire experienced economic growth. B. unemployment, and wage rates in labor markets. D. lower prices before reducing production or building up inventories. C. relatively sticky. 47. Privacy 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 best explains why prices tend to be inflexible even when demand changes? C. nominal GDP, unemployment, and inflation. B. most firms have agreements with each other to fix prices at profit-maximizing levels. A price of $60 in this market will result in: Two goods are complements if a decrease in the price of one good. 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 In situations of sticky prices and negative demand shocks we would expect firms to: A. build up inventories before reducing production. 10. In situations of sticky prices and negative demand shocks we would expect firms to: a. deplete inventories before increasing production. A. Which figure(s) represent a situation where prices are flexible? & B. differs over time as prices become increasingly flexible in the months and years following a shock. 5. D. increase prices before reducing production or … If an economy wants to increase its current level of investment, it must: A. sacrifice future consumption. 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. 3. B. rates of population growth virtually matched rates of output growth. B. reduce production before building up inventories. 2. Each of the following is a determinant of supply except: Ford Motor Company announces that it will offer $1,500 rebates on new Mustangs starting next month. Shocks to the economy occur: A. when expectations are unmet. As a result, there has been a significant decrease in the amount of beef produced. D. output and population growth were stagnant. Which of the following statements best describes price flexibility in the economy? Firms can maintain production levels and adjust inventories in response to demand shocks. D. Firms can maintain production levels and adjust inventories in response to demand shocks. 20. Macroeconomics is mostly focused on: A. the individual markets within an economy. B. reduce production before building up inventories. In situations of sticky prices and negative demand shocks, we would expect firms to: 73. B. deplete inventories before increasing production. C. build up inventories before reducing production. 18. Terms deplete … 16. Prices for airline tickets change on average about once per month. In situations of sticky prices and negative demand shocks, we 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? In situations of sticky prices and negative demand shocks we would expect firms to: A. deplete inventories before increasing production. C. build up inventories before reducing production. Increased present saving: A. comes at the expense of reduced current investment. b. the price level will rise. B. nominal GDP over time. 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. © 2003-2020 Chegg Inc. All rights reserved. When they finish school and start careers, their consumption of both goods frequently declines. Demand shocks occur with greater frequency. Which of the following results from firms holding inventories? deplete inventories before increasing production. In situations of sticky prices and negative demand shocks, we would expect firms to A. deplete inventories before increasing production. 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? D. foreign competition discourages domestic firms from price changes. C. increase production before building up inventories. C. build up inventories before reducing production. The two topics of primary concern in macroeconomics are: A. short-run fluctuations in output and employment, and long-run economic growth. D. real GDP, nominal GDP, and unemployment. 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. monopoly power of corporations, and small business profitability. 1. B. rates of population growth virtually matched rates of output growth. D. is easily controlled and stabilized by government policy. 9. 7. Which of the following best explains the decrease in production? 5. B. print more money. D. is only possible if the economy is experiencing positive growth in real GDP. In situations of sticky prices and negative demand shocks we would expect firms to: A. deplete inventories before increasing production. B. comes at the expense of reduced current consumption. D. lower prices before … In situations of sticky prices and negative demand shocks we would expect firms to: build up inventories before reducing production. 74. 19. C. differs over time as prices become increasingly sticky in the months and years following a shock. Which of the following events would most likely result in lower employment? B. reduce production before building up inventories. c. 12. 14. 17. D. relatively flexible. In situations of sticky prices and negative demand shocks we would expect firms to: Refer to the figures below. D. real GDP accounts for changes in the quality of goods and services produced.

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