If the price of inputs rises and personal income taxes rise:
a. Aggregate demand rises and aggregate supply falls.
b. Aggregate demand rises, but aggregate supply does not change.
c. Aggregate demand falls and aggregate supply rises.
d. Aggregate demand rises and aggregate supply rises.
e. Aggregate demand falls and aggregate supply falls.
.E
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In the long-run equilibrium, perfectly competitive firms make zero economic profit because of
A) government regulations. B) the ability of firms to enter and exit. C) inefficient production processes. D) high fixed costs.
Suppose you purchase a new home for $150,000, making a down payment of 10% and taking out a mortgage on the balance. What is the return on your investment in your home if one year later the price of your home decreases by 20%?
A) -10% B) -30% C) -50% D) -200%