If a price ceiling is set above the equilibrium price,
A. there will be a shortage.
B. quantity demanded will equal quantity supplied.
C. there will be a surplus.
D. demand will be less than supply.
Answer: B
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
Which statement best describes the immediate post-slavery experience for ex-slaves?
a. They were able to engage fully in the economic, social and political activities in their towns. b. Freedmen took advantage of the educational opportunities available to them and had education rates equal to those of whites. c. Most freedmen immediately moved north. d. Their life expectancies increased dramatically. e. Their income increased relative to the income of whites.
Suppose the velocity of money is 6, the amount of money in circulation is $600 billion, the index of prices is 180, and real GDP is $20 billion. According to the strict quantity theory of money, if the money supply decreased to $300 billion,
a. the velocity of money would rise to 12. b. the index of prices would fall to 90. c. real GDP would decrease to $10 billion. d. the velocity of money would decline to 3.
The first step in economic analysis is to
a. explore how the equilibrium changes if the constraints change. b. make explicit assumptions about the desirability and the cost of various alternatives. c. apply the equimarginal principle to the problem being considered. d. determine how agents' constraints are interrelated.