A black market
A) is legal only when it is associated with government price ceilings.
B) is defined as the deadweight loss associated with taxes.
C) benefits no one.
D) is a potential outcome of a price ceiling.
E) is always legal.
D
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If the quantity of money starts to grow more rapidly than real GDP and velocity does not change, the result is
A) slower growth in the price level. B) an increase in investment. C) more rapid growth in potential GDP. D) the inflation rate rises. E) an eventual slowing in the growth rate of the quantity of money.
Capital rationing
A) exists when a company sets an arbitrary limit on the amount of investment it is willing to undertake, so that not all projects with an NPV higher than the cost of capital will be accepted. B) generally does not permit a company to achieve maximum value. C) seems to occur quite frequently among corporations. D) All of the above
The interest rate effect suggests that the negative slope of the aggregate demand curve results at least in part because changes in the price level affect: a. domestic purchases of foreign goods
b. the holdings of money by households and firms. c. the real purchasing power of assets. d. the level of income.
Perfectly competitive markets are not the best at producing the goods that are desired by consumers
a. True b. False Indicate whether the statement is true or false