Around Easter time, the price of eggs rises. Some consumers complain about this and claim stores are 'price gouging.' Are there any positive functions played by the higher price of eggs around Easter? What would happen if the price of eggs were not permitted to rise by law?
The price of eggs rises around Easter due to simple supply and demand. The positive side of this price increase is that it is what produces the increased quantity of eggs supplied to satisfy consumers around this time of year. If price were not permitted to rise, there would be a shortage of eggs around Easter..
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The following table provides data for an economy in a certain year.Consumption expenditures50Imports40Government purchases of goods and services20Construction of new homes and apartments30Sales of existing homes and apartments40Exports50Government payments to retirees10Household purchases of durable goods20Beginning-of-year inventory10End-of-year inventory20Business fixed investment30Given the data in the table, compute the government purchases component of GDP.
A. 20 B. 30 C. 10 D. 40
If the quantity of money demanded is greater than the quantity supplied, then in the short run the
A) demand for financial assets increases. B) price of financial assets rises. C) nominal interest rate rises. D) nominal interest rate falls. E) price level rises.
The payment of unemployment compensation tends to induce business firms to
A) lay off workers as opposed to lowering sales. B) search for new workers for shorter periods of time. C) lay off workers as opposed to increasing inventories and/or reducing hours worked for all employees. D) recall previously laid off workers more rapidly.
Mutual funds ________
A) accept deposits and issue loans B) sell shares and buy financial instruments C) are a special type of commercial bank D) issue policies and receive premiums