Which of the following is not a problem associated with price floors?
a. chronic excess supply
b. the transfer of income nonfarm taxpayers to farmers
c. large subsidies paid by the government
d. a higher price for consumers
e. the emergence of black markets for agricultural commodities
e. the emergence of black markets for agricultural commodities
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
We assume leisure is a normal good. This implies that
A) an increase in taxes decreases the demand for leisure. B) households maximize utility. C) preferences over consumption are well defined. D) an increase in the wage increases demand for leisure.
A monopolistic competitor would face a demand curve with a
A) positive slope. B) negative slope. C) constant slope. D) slope equal to 0.
In regards to the uncommon length of the Great Depression, both Schumpeter and Higgs contend that:
a. private investment remained depressed in part due to the political climate created by the New Deal. b. Social Security and the freedoms granted to labor, along with a progressive tax structure promoted growth in private investment. c. the undistributed profits tax of 1936 encouraged businesses to undertake long-term investments. d. the New Deal rhetoric from President Roosevelt, offered a pro-business slant that offended labor groups.