The Economic Crisis That Began in 2008, Sometimes Called the Great

question 103

Multiple Choice

The economic crisis that began in 2008, sometimes called the Great Recession (much like the Great Depression) , generated an expanded role for the national government relative to __________ in economic affairs.

• A) other countries
• B) the United Nations
• C) the states
• D) the cities
• E) supranational organizations such as NATO and SEATO

Grasp the relationship between price changes and quantity demanded through the substitution and income effects.

Comprehend the construction and interpretation of both demand and supply curves.

Recognize the effects of income changes on consumer behavior and demand for different types of goods (normal and inferior goods).

Identify and differentiate between substitute goods and complementary goods.

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Definitions:

Increasing-Cost Industry

An industry in which production costs increase as the industry's output expands.

Constant-Cost Industry

An industry where the cost of production does not change as the industry's output changes.

Increasing-Cost Industry

An industry in which costs per unit of output increase as the scale of output is increased due to factors such as shortages of resources or higher input costs.

Long-Run Equilibrium

A state in economics where all factors of production and outputs are variable, allowing for the adjustment to changes in demand, supply, and prices, resulting in a situation where firms earn normal profit.