An outcome that can result from either a price ceiling or a price floor is
a. an enhancement of efficiency.
b. undesirable rationing mechanisms.
c. a surplus.
d. a shortage.
b
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The more the short-run output exceeds an economy's potential, _____
a. the smaller the expansionary gap b. the greater the upward pressure on the price level c. the larger the recessionary gap d. the greater the downward pressure on the price level e. the lesser the demand for resources
Refer to the graph shown. Within which part of the production function is the firm most likely to operate?
A. A B. B C. C D. B and C
The exchange rate of Country X is set by government decisions and maintained by government actions. Country X follows a
A. floating exchange rate policy. B. free market exchange rate policy. C. pegged exchange rate policy. D. fixed exchange rate policy.
Price floors
A) provide free market incentives for producers. B) create surpluses by setting the price above equilibrium. C) create shortages by setting the price above equilibrium. D) are used by advocates of the free market.