Suppose demand decreases, but there is no change in supply. As the market reaches its new equilibrium:
A. excess demand will lead the price to fall.
B. excess demand will lead the price to rise.
C. excess supply will lead the price to rise.
D. excess supply will lead the price to fall.
Answer: D
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The CPI compiled by the Bureau of Labor Statistics is used in the computations for the
A. foreign exchange rate. B. inflation rate. C. interest rate. D. unemployment rate.
A current account surplus
A) poses a problem if domestic savings are being invested more profitably abroad than they would be at home. B) may pose no problem if domestic savings are being invested more profitably abroad than they would be at home. C) may pose no problem if domestic savings are being invested less profitably abroad than they would be at home. D) there is no relation between current account surplus and between savings and investment. E) poses a problem if domestic savings are being invested less profitably abroad than they would be at home.
During the American Revolution, Washington's army nearly starved to death after price controls were enacted to "help" buy food for the army at affordable prices. The Continental Congress later passed a law which
a. exhorted the public to obey the law and help supply food to the army. b. passed tax increases to punish those who refused to sell the food. c. revised the American Law of Supply and Demand. d. overrode local ordinances and essentially repealed the price controls. e. called for the repeal of other price control measures.
For each of the following changes, which equilibrium curve (IS, LM, or FE) is shifted? Draw the change in the underlying demand or supply curves (for example, money demand and supply for the LM curve) and show how the equilibrium curve changes.(a)Expected inflation increases.(b)The future marginal productivity of capital increases.(c)Labor supply decreases.(d)Future income declines.(e)There's a temporary beneficial supply shock.(f)The nominal interest rate on money rises.
What will be an ideal response?