Assuming compact discs and cassettes are substitute goods, a decrease in the price of cassettes will cause the demand curve for compact discs to:
a. shift to the left as consumers switch from buying discs to cassettes.
b. shift to the right as consumers switch from buying discs to cassettes.
c. shift to the left as producers increase cassette production and reduce disc production.
d. remain unchanged since discs and cassettes are sold in separate markets.
a
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Imagine a hypothetical world in which, over the last fifty years, both real GDP and prices have trended downward in most countries. Continuing falls in the level of real GDP and the price level can be explained by
a) neither technological ability nor changes in the money supply can explain continuing falls in the level of real GDP contraction and the price level. b) continuing losses in technological ability alone. c) continuing losses in technological ability and continuing decreases in the money supply. d) continuing decreases in the money supply along.
Which of the following were not actions taken by the Federal Reserve in order to stimulate the economy during the recession of 2007-2009?
a. decreasing the discount rate b. suspending trading on the major stock exchanges c. massive lending to banks d. open market purchases of assets other than Treasury bills