If the government set a price floor at $8
A. there would be a temporary surplus, then prices would fall to equilibrium.
B. there would be a permanent surplus, at least until the price floor was lifted.
C. the price would rise back to the equilibrium price.
D. the price floor would not have any effect on this market.
B. there would be a permanent surplus, at least until the price floor was lifted.
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Which statement is true?
A. We have had a central bank since 1789. B. We have never had a central bank. C. Our central bank was formed in 1913. D. We did not have a central bank prior to the Federal Reserve.
Splitting up a monopoly is often justified on the grounds that
a. consumers prefer dealing with small firms b. small firms have lower costs c. competition is inherently efficient d. nationalization is a less preferred option e. monopolies are inevitable and desirable
Kelly earns $72,000 per year from her fashion boutique. If the government increases the rate of tax from 12 percent to 15 percent, then her annual disposable income would: a. increase by $2,160
b. decrease by $2,160. c. increase by $10,800. d. decrease by $10,800.
"The only thing that results from expansionary demand-side fiscal policy is that the price level will rise." The economist who said this most likely believes that
A) there is likely to be a lot of crowding out if government spending rises. B) the AS curve is vertical. C) there is unlikely to be much crowding out if government spending rises. D) investment is interest inelastic. E) b and c