Question 1. The law of demand is an inverse relationship between the price and quantity demanded. Evaluate
how you can relate this law to a recent purchase that you have made. Why do you think this law is an effective
law that holds within markets? How do you think a store is able to deal with a shortage that is present at a
grocery store? What does a shortage reflect on the product?
Question 2. The gross domestic product (GDP) is looking at the total production of goods and services that are
produced within the United States economy. Examine what the GDP has done in the past 5 years in the United
States. What does this indicator tell us about how the economy is doing?
Question 3. The change in business cycles can impact how the economy is operating. Explain how
unemployment changes over the business cycle. Why do these changes occur? What type of consumer goods
are most affected by the business cycle: durable goods or nondurable goods? Why?
The citation can be used from
Macroeconomics, Hubbard and O’Brien, 6th Edition, ISBN: 9780134439839
Sample Solution
