If the elasticity of supply is much greater than the elasticity of demand, a subsidy awarded to demanders will
a. benefit the demanders more than the suppliers
b. benefit the suppliers more than the demanders
c. the benefit of the subsidy will be equally shared between the demanders and the suppliers
d. allow the demanders to be the only ones who will benefit
e. Without more information as to the amount of the subsidy, who will benefit more can not be determined
A
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When a law freezes residential rents at their existing level for as long as the vacancy rate remains below some target level,
A) owners will be encouraged to supply additional rental units. B) rents will be frozen indefinitely, or at least until the law is changed. C) affordable housing to low-income people will be guaranteed. D) the vacancy rate will rise.
If the equilibrium exchange rate is 15 pesos per dollar and the central bank fixes the exchange rate at 17 pesos per dollar then we can conclude that the peso is
(a) appreciated. (b) depreciated. (c) overvalued. (d) undervalued.
The interest rate on Treasury Inflation Indexed Securities can be roughly interpreted as
A) the real interest rate. B) the nominal interest rate. C) the rate of inflation. D) the rate of deflation.
Monetarists believe that:
a. velocity is constant. b. velocity is highly predictable. c. there are three motives for demanding money. d. changes in the money supply cause changes in velocity. e. a change in the money supply can affect real GDP.