Suppose that sharply lower coffee prices lead to a decrease in the demand for tea. Tea price decreases, and the tea producers experience short-run economic losses. If the tea industry is a price-taker market, after sufficient time is allowed for the market to adjust fully to the decrease in the demand for tea, one would expect the tea industry's output to
a. increase and economic losses to persist.
b. decline and economic losses to persist.
c. decline and economic losses to disappear.
d. increase and economic losses to disappear
D
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Suppose that in 2015 a country has a population of 1 million and real GDP of $1 billion. In 2016, the population is 1.1 million and the real GDP is $1.1 billion. The real GDP per person growth rate is
A) $1000. B) positive. C) negative. D) zero.
In the above figure, the initial supply of loanable funds curve is SLF0 and the demand for loanable funds investment curve is DLF0. An increase in the real interest rate to 7 percent could be caused by
A) an increase in investment demand. B) a decrease in the expected profit. C) an increase in people's disposable incomes. D) an expansion that increased both saving and investment by the same amount.