Explain how the financial crisis turned into a major economic crisis
What will be an ideal response?
Hit by the decrease in housing prices and the collapse in stock prices, and worried that this might be the beginning of another Great Depression, people sharply cut back consumption. Worried about sales and uncertain about the future, firms sharply cut back investment.. Decreases in consumption and investment led to decrease in demand, which in turn, led to decrease in output.
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An analyst on a local news channel argues that the recent corporate scandals "demonstrated very clearly that self-interest always contradicts social interest." Do you agree or disagree? Substantiate your answer
What will be an ideal response?
When the price of oranges increases from $4 to $6 per bag, the quantity demanded of oranges decreases from 800 bags to 700 bags. The price elasticity of demand over this price range is equal to
A) 3. B) 3/7 or 0.4286. C) 1/3 or 0.3333. D) 1/4 or 0.25.