In the Specific Factors Model,a 5% Increase in the Price

question 30

Multiple Choice

In the specific factors model,a 5% increase in the price of food accompanied by a 10% increase in the price of cloth will cause ________ in the welfare of labor,________ in the welfare of the fixed factor in the production of food,and ________ in the welfare of the fixed factor in the production of cloth.

• A) an ambiguous change; a decrease; an increase
• B) an ambiguous change; an ambiguous change; an ambiguous change
• C) a decrease; an ambiguous change; an ambiguous change
• D) an increase; a decrease; an increase
• E) an ambiguous change; an increase; a decrease

Assess the risks associated with different mortgage products, including sub-prime loans and adjustable-rate mortgages (ARMs).

Describe the function and impact of the secondary mortgage market.

Explain the implications of high household debt and its effects on economic stability and individual financial security.

Interpret the causes behind the rise and fall of housing prices and its impact on the economy.

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Definitions:

Salary

Regular payments made by an employer to an employee, typically on a monthly or biweekly basis, in exchange for professional services rendered.

Capital Balances

The amount of equity ownership a partner has in a partnership, often represented as the difference between their contributions to the partnership and any withdrawals.

Net Loss

Occurs when a company's expenses exceed its revenues during a specific period, indicating a negative financial performance.

Capital Account

An account on the balance sheet that shows the equity and debt investments into a country minus its investments abroad.