In a city with rent-controlled apartments, all of the following are true except
A) apartments usually rent for rates lower than the market rate.
B) apartments are often in shorter supply than they would be without rent control.
C) it usually takes more time to find an apartment than it would without rent control.
D) landlords have an incentive to rent more apartments than they would without rent control.
Answer: D
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When a market consists of a few large firms and barriers to entry exist, it:
A. must be perfectly competitive. B. is likely an oligopoly. C. must be monopolistically competitive. D. is likely a monopoly.
One of the three reasons as to why the oversimplified multiplier formula overstates the multiplier is that it ignores price-level changes, which reduce the multiplier.
Answer the following statement true (T) or false (F)
Suppose that the cross price elasticity of demand between goods Y and Z equals 1.5. Which of the following is TRUE?
A) Goods Y and Z are complements because the cross price elasticity is greater than one. B) Goods Y and Z are complements because the cross price elasticity is positive. C) Goods Y and Z are substitutes because the cross price elasticity is greater than one. D) Goods Y and Z are substitutes because the cross price elasticity is positive.
Keynesians and monetarists share the belief that
a. recessions are caused by falls in aggregate demand. b. the demand for money is stable. c. excess demand is a chronic problem in modern economies. d. the Federal Reserve is responsible for most recessions. e. stabilization policy is beneficial.