Refer to Figure 9.2. A movement from point d to point b could be caused by a(n)
A) increase in government spending.
B) increase in the price of oil.
C) increase in taxes.
D) decrease in short-run aggregate supply.
C
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When mortgage loans are securitized, they are
A) issued to borrowers with flawed credit histories. B) issued to borrowers who fail to document their income. C) bundled together by financial institutions and sold to investors. D) guaranteed by the federal government.
Suppose the current price and quantity of widgets is p = $50 and Q = 125
The demand for widgets is log-linear and the price elasticity of demand is E = -2. The supply of widgets is perfectly elastic. a. Derive the equations for the demand and supply of widgets. b. What would be the effect on the equilibrium price and quantity if demand were to increase by 500 widgets?