Refer to the table. Suppose that demand is represented by columns (3) and (2) and supply is represented by columns (3) and (5). If the price were artificially set at $6:
A. the market would clear.
B. a surplus of 40 units would occur.
C. a shortage of 40 units would occur.
D. demand would change from columns (3) and (2) to columns (3) and (1).
C. a shortage of 40 units would occur.
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Which organization officially tracks all business cycles in the U.S. economy?
a. Department of Commerce b. National Bureau of Economic Research c. Bureau of Economic Analysis d. Census Bureau
Which of the following markets best approximates the perfectly competitive market structure?
a. automobile manufacturing b. insurance c. world commodity markets d. airlines e. manufacture of stereo equipment
Concern about an international crisis has caused consumers to save their money and postpone big purchases. What is the effect on aggregate demand and aggregate supply?
(A) Both aggregate demand and aggregate supply will decrease, leading to lower real GDP. (B) Aggregate demand will decrease, lowering both real GDP and the price level. (C) Aggregate supply will decrease, raising the price level and lowering real GDP. (D) No change on aggregate demand and aggregate supply.
According to the classical model, an increase in aggregate demand would
A) lead the economy to recession. B) lead the economy to a deflationary cycle. C) cause an adjustment to a higher price level. D) raise real Gross Domestic Product (GDP) but leave the price level unchanged.