Suppose supply decreases, but there is no change in demand. As the market reaches its new equilibrium:
A. excess demand will lead the price to fall.
B. excess supply will lead the price to rise.
C. excess supply will lead the price to fall.
D. excess demand will lead the price to rise.
Answer: D
You might also like to view...
If the income effect is larger than the substitution effect, then a wage hike will be accompanied by an increase in the quantity of labor supplied
Indicate whether the statement is true or false
Micromania imports a good costing it $12,000 and exports a different good for a price of $9,000 . Ten years ago it paid $6,000 for the good and received $3,000 for the good it exported. How has the terms of trade index changed from then to now?
a. From 25 to 75 b. From 66 to 300 c. From 75 to 25 d. From 300 to 66 e. None of the above
The share of federal government spending on healthcare has risen substantially over time. This is most likely a result of
a. medical advances that provide new, better, but often more expensive medical treatments. b. a rising population of the elderly in the economy. c. health insurance reform that will include government subsidies for health insurance for many low-to-moderate income families. d. All of the above are important factors.
A crisis caused by sudden capital flight
A) is easy to resolve with capital controls. B) might be lessened if investor confidence can be increased. C) has a clear and unique equilibrium outcome. D) can be corrected through currency devaluation.