Suppose the only two goods that Charlie consumes are wine and cheese. When wine sells for $10 a bottle and cheese sell for $10 a pound, he buys 6 bottles of wine and 4 pounds of cheese — spending his entire income of $100 . One day the price of wine falls to $5 a bottle and the price of cheese increases to $20 a pound, while his income does not change. The bundle of wine and cheese that he
purchased at the old prices now costs
a. the same amount at the new prices.
b. less than Charlie's income at the new prices.
c. more than Charlie's income at the new prices.
d. We do not have enough information to answer the question.
c
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According to your authors, what caused the unsustainable housing bubble followed by the Great Recession?
A) Unprecedented greed B) The Fed's lowering of interest rates during the early 2000s C) Deregulation in the financial and investment banking markets D) All of the above. E) None of the above.
The international capital market is:
A) the international currency exchange. B) a market in which capital assets are exchanged for services. C) the market that is subject to intense regulation and must file a report to the Basel committee on a biannual basis. D) not really a single market, but a group of closely interconnected markets in which asset exchanges with some international dimension take place. E) an organization of fiscal policies that dictate international trade.