Between the Middle of 2006 and the First Quarter of 2012

question 62

Multiple Choice

Between the middle of 2006 and the first quarter of 2012, the national index for the U.S. housing market:

• A) declined by about 10.1 percent.
• B) declined by about 42 percent.
• C) increased by about 33 percent.
• D) was flat.
• E) grew at the rate of inflation.

Understand the causes and effects of economic recessions and depressions in U.S. history.

Recognize the role of governmental policies in shaping economic outcomes.

Analyze the impact of major events, such as wars and technological advancements, on the U.S. economy.

Describe the evolution of U.S. economic growth and development over time.

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Definitions:

Utility Function

Describes how different combinations of goods or services (or different outcomes) provide levels of satisfaction or utility to an individual.

Substitution Effect

The change in consumption patterns due to changes in the relative prices of goods, leading consumers to substitute more expensive items with cheaper alternatives.

Giffen Good

A product that experiences an increase in demand as its price increases, contrary to the law of demand, typically because it is a staple whose cheaper substitutes are not as affordable.

Inferior Good

A type of good for which demand decreases as the income of the consumer increases, contrary to normal goods.