When a price ceiling below the equilibrium price is imposed on a good, production of the good
A) increases.
B) decreases.
C) does not change.
D) is frozen at the pre-ceiling level.
E) either increases or decreases depending on whether the supply of the good increases or decreases when the price ceiling is imposed.
B
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Attempts to influence the law for your own private economic advantage is called
A) tax imposition. B) subsidizing. C) rent seeking. D) creating a deadweight loss.
Assume the long-term nominal interest rate is 7% and the expected inflation rate is 3%
If the Fed increases the money supply and as a result, the expected inflation rate increases to 5%, then based on the Fisher effect, the long-term real interest rate will A) remain at 4%. B) increase to 6%. C) fall to 3%. D) increase to 9%.
Diminishing marginal returns refers to the fact that
a. holding other inputs constant, additional increases in labor lead to smaller changes in output. b. holding other inputs constant, additional increases in labor lead to lower output. c. additional increases in labor always lead to smaller changes in output d. the returns to labor fall as real wages rise.
The rental price of capital is the price a person pays to own the capital indefinitely
a. True b. False Indicate whether the statement is true or false