Which took the major brunt of the decline in total demand in the Great Recession, real output or prices?
What will be an ideal response?
Real output dropped and unemployment increased during the Great Recession that began in late 2007 and lasted through the middle of 2009. The price level remained relatively constant, but demand for goods and services unexpectedly fell. Falling demand contributed to the decline in real output in most major industries in the economy.
You might also like to view...
How would a merger between Coca-Cola and Pepsi Cola affect the four-firm concentration ratio for the soft drink market? How would it affect the Herfindahl-Hirschman Index for the soft drink market?
What will be an ideal response?
Suppose an economy produces milk and honey, and milk is plotted along the horizontal axis of the production possibilities frontier. The MRT is 2.5 at the current point of production, and the price of honey is $5 per unit
What is the current price of milk if the market outcome is efficient? A) $12.50 per unit B) $10 per unit C) $2 per unit D) $1 per unit