When the U.S. housing market crashed, it caused all of the following except:
A. all sellers of real estate to profit when selling their house.
B. lenders to stop lending.
C. the U.S. economy to tip into the Great Recession.
D. banks to go bust due people not paying their mortgages.
Answer: A
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The marginal approach to profit
a. says that a firm should take any action that adds more to cost than it adds to revenue b. says that a firm should take any action that adds more to revenue than it adds to cost c. says that a firm should strive to set profit equal to zero. d. says that a firms profit is maximized when average revenue equals average cost e. says that profit should be marginalized
The excess capacity theorem implies that
a. consumers would be better off if some monopolistically competitive firms left their markets. b. consumers would be better off with more standardization of products. c. monopolistic competition benefits society by eliminating excess capacity in production. d. monopolistic competition wastes some of society's resources but the elimination of this waste does not necessarily benefit consumers.