A binding price ceiling:
A. will cause quantity demanded to exceed quantity supplied.
B. will cause quantity supplied to exceed quantity demanded.
C. will set a legal minimum price in a market.
D. will increase total well-being.
Answer: A
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To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
A bank's reserves include
What will be an ideal response?
The market system works by getting each person, motivated by his or her own self-interest, to produce products for other people.
Answer the following statement true (T) or false (F)
If depository insurance exists, bank managers may make riskier loans than they would have otherwise, which is an example of
A. moral hazard. B. regulatory lag. C. adverse selection. D. irrational behavior.