U.S. banks are required by law to keep most of their assets as reserves
Indicate whether the statement is true or false
FALSE
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A market system works very well in solving some basic problems of the economy but it fails in some cases. Provide examples.
What will be an ideal response?
A price ceiling is
A) the lowest price a seller can charge without losing all of its customers. B) a legal minimum price below which a good or service cannot be sold. C) a legal price above which a good or service cannot be sold. D) a nonprice rationing device.
Refer to the graph shown. Which statement best characterizes the difference between the effect of a price ceiling in the short run and the long run?
A. A price ceiling of P0 will create a shortage of (Q3 ? Q0) in the short run and the long run. B. A price ceiling of P0 will create a shortage of (Q4 ? Q0) in the short run and the long run. C. A price ceiling of P2 will create a shortage of (Q3 ? Q1) in the short run, but a greater shortage of (Q3 ? Q0) in the long run. D. A price ceiling of P2 will create a shortage of (Q3 ? Q0) in the short run and a smaller shortage of (Q3 ? Q1) in the long run.
Strategic complementarity refers to
a) two trade partners producing goods in which they have the greatest relative efficiency, and sharing the benefits through trade b) the increase in demand for one good when the price of another good falls c) a market failure in which individual decisions are not coordinated d) the relationship between capital and labor during a business cycle e) government subsidies for investment