Government imposed price controls often lead to
A) illegal trades of the good.
B) the most efficient use of resources.
C) the equilibrium solution in terms of price and quantity.
D) maximization of profits.
A
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
What is the short-run and long-run effect on the nominal interest rate from an increase in the growth rate of the quantity of money?
What will be an ideal response?
If a product is narrowly defined, it is likely to
A) have many substitutes and therefore its demand is elastic. B) have few substitutes, and therefore its demand is less elastic. C) be unique, and therefore its demand is inelastic. D) be unique and have many substitutes. E) have a larger proportion of income spent on it.
Which of the following is an impact of a rent ceiling set below the equilibrium rent?
A) Renters find apartments to rent more rapidly because the rent ceiling is lower. B) Landlords' incentives to provide apartments decrease. C) The supply of apartments increases as soon as the rent ceiling is imposed. D) A surplus of housing occurs. E) Search for apartments decreases because renters need no longer search for the apartment with the lowest rent.