Suppose the market clearing price for gasoline is $2.25 per gallon. Now suppose that policy makers pass a law requiring that the maximum price that can be charged is $2.0 per gallon. Such a situation is an example of
A) a price control that will lead to a surplus of gasoline on the market.
B) a price floor that will lead to a shortage of gasoline on the market.
C) a price ceiling that will lead to a shortage of gasoline on the market.
D) a price floor that will lead to a surplus of gasoline on the market.
Answer: C
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Differentiate between an oligopoly and a monopolistic competition on the basis of the number of firms and the degree of product differentiation
What will be an ideal response?
The steps in the process of commercial bank lending in order are
A) borrower bank search, credit analysis, borrower-bank negotiation, bank funding. B) borrower bank search, borrower-bank negotiation, credit analysis, bank funding. C) credit analysis, borrower bank search, borrower-bank negotiation, bank funding. D) borrower-bank negotiation, borrower bank search, credit analysis, bank funding.
One explanation for the slope of the aggregate demand curve is that: a. nominal income falls and so does the demand for goods and services as prices rise
b. falling prices make people feel poorer and reduce spending. c. the government spends less to drive the price level back to normal as prices rise. d. businesses increase spending when inflation is high and rising. e. domestic goods become more expensive relative to foreign goods when prices rise, reducing exports.
Which of the following assets is best to hold in periods of high and expected inflation?
a. Cash. b. Checking account deposits. c. Land. d. Treasury Bills. e. Bonds.