How do large increases in oil prices affect the economy?
What will be an ideal response?
Proponents of real business cycle theory tend to emphasize the importance of changing input prices- especially the price of oil. A large increase in the price of oil is likely to decrease the productivity of firms that use oil. Since almost all firms use oil in one form or another - oil products are a key source of energy - changes in the price of oil function like technology changes. As oil price changes can be abrupt, including large increases in the price of oil, this factor does help to explain recessions.
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The table above gives the domestic demand and supply schedules for a good. Suppose the world price of the good is $40 and the government imposes a $20 per unit tariff. How much will the government collect as tariff revenue?
A) $160 B) $360 C) $320 D) $240 E) $80
In 2013, Ozzie purchased a 2010 Ford Escort from his neighbor for his son, purchased a 2009 "one owner" Camry from Larchmont Toyota for his wife, bought a 2013 new Ford for himself, and sold his 2002 Dodge Caravan to his teenage nephew
Which, if any, of these transactions will be included in GDP in 2013? A) all four transactions B) all three purchases but not the sale C) the purchase of the Ford and the Caravan D) only the purchase of the Ford