An example of a price ceiling would be:
A. a ration coupon.
B. a guarantee of a target price for farm products.
C. parity pricing.
D. rent control.
Answer: D
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The reason that the prisoner's dilemma presents a dilemma is that:
A. each player has an incentive to play his or her dominated strategy, but when both choose the dominated strategy each player has a lower payoff than if they both had chosen the dominant strategy. B. the market cannot be in equilibrium because the players do not have dominant strategies. C. neither player has a comparative advantage, so neither can infer what the other player will choose. D. each player has an incentive to play his or her dominant strategy, but when both choose the dominant strategy each player has a lower payoff than if they both had chosen the dominated strategy.
The quantity of goods exchanged in a market will be below the equilibrium quantity
A. when the price is either held above or below the equilibrium price. B. only when the price is held above the equilibrium price. C. only when the price is held below the equilibrium price. D. only when the price is rising.
In order to simplify the equation for the multiplier to its familiar, relatively simple form, we make use of the
a. assumption that increases in government purchases have no effect on consumer spending. b. assumption that the feedback effects associated with changes in government purchases become negligible after two or three rounds of spending have occurred. c. empirical evidence that points to a value of about 3/4 for the MPC. d. fact that the multiplier effect is represented by an infinite geometric series.
If the unemployment rate fell from 8 percent to 6 percent, the cyclical unemployment rate
A. Went up. B. Stayed the same. C. Fell by less than 2%. D. Fell by 2%. E. Fell by more than 2%.