Consider an economy in equilibrium, and assume no change in ...

[ts19998]

Consider an economy in equilibrium, and assume no change in aggregate demand. An earthquake that destroys many factories across the country would result in a(n):
 a. increase in the average price level and a decrease in real GDP.
  b. increase in the average price level and no change in real GDP.
  c. increase in the average price level and an increase in real GDP.
  d. decrease in the average price level and an increase in real GDP.
  e. decrease in the average price level and a decrease in real GDP.

Question 2

To assess whether or not a good is normal or inferior, economists are interested in the cross price elasticity of demand.
 a. True
  b. False
  Indicate whether the statement is true or false

[kthug]

Answer to Question 1

a

Answer to Question 2

False

[ts19998]

YES! Correct, THANKS for helping me on my review

[ktidd]

Thanks for the timely response, appreciate it