Which of the following is true of economic expansions?
A) Economic expansions are defined as the period between recessions.
B) Consumption increases but investment falls during periods of economic expansion.
C) Output grows during periods of economic expansion, but the unemployment rate is also high.
D) Governments can correctly predict the length of periods of economic expansion.
A
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A market maker faces the following demand and supply for widgets. Eleven buyers are willing to buy at the following prices: $15, $14, $13, $12, $11, $10, $9, $8, $7, $6, $5 . Eleven sellers are also willing to sell at the same prices. If the market maker is free to choose the number of transactions he can make, what is his maximum profit?
a. $8 b. $10 c. $18 d. $28
Suppose that the average equilibrium monthly rental price of apartments and rooms in a college town had been steady at $600, but then the college expanded enrollment from 10,000 to 12,000, and suddenly there was a shortage of rental housing at the prevailing price of $600 . Which of the following is most likely to be true?
a. The shortage occurred because supply increased, and a new market equilibrium will feature lower rental prices and fewer rental units available on the market. b. The shortage occurred because demand increased, and a new market equilibrium will feature higher rental prices and fewer rental units available on the market. c. The shortage occurred because demand decreased, and a new market equilibrium will feature lower rental prices and fewer rental units available on the market. d. The shortage occurred because demand increased, and a new market equilibrium will feature higher rental prices and more rental units available on the market.