Consider a market with a price ceiling. If the price ceiling is raised which of the following would happen?
a. The consumer surplus would increase, the producer surplus would decrease and the dead weight loss would decrease
b. The consumer surplus would increase, the producer surplus would decrease and the dead weight loss would increase
c. The consumer surplus, the producer surplus and the dead weight loss would all decrease
d. The consumer surplus, the producer surplus and the dead weight loss would all increase
e. The consumer surplus would decrease, the producer surplus would increase and the dead weight loss would decrease
E
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Starting from long-run equilibrium, a large tax increase will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. recessionary; lower; potential B. expansionary; lower; potential C. expansionary; higher; potential D. recessionary; lower; lower
As the housing market took off in the early 2000s:
A. household debt became positive for the first time since the Great Depression. B. the growth in household debt slowed. C. the growth in household debt accelerated. D. household debt became negative for the first time since the Great Depression.
Which of the following is an appropriate fiscal policy response to high inflation?
a. increase interest rates b. increase government purchases c. decrease taxes d. none of the above
Which group does not benefit from trade when the United States imports cotton?
A. U.S. cotton growers. B. U.S. cotton shirt producers. C. U.S. consumers who buy cotton shirts. D. Foreign cotton growers.