If quantity supplied exceeds quantity demanded, there is a tendency for:
A. price to rise to restore equilibrium.
B. price to fall to restore equilibrium.
C. the demand curve to shift to the right to restore equilibrium.
D. the demand curve to shift to the left to restore equilibrium.
Answer: B
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In Macroland, a country whose economy operates according to Okun's law, potential GDP equals $10 trillion, the actual rate of unemployment is 8 percent, and the natural unemployment rate is 6 percent. What is real actual GDP in Macroland?
A. $9.6 trillion B. $10 trillion C. $9.8 trillion D. $10.2 trillion
Discuss the inefficiencies that can be caused by stock market bubbles, especially focusing on firms and consumers.
What will be an ideal response?
Professor's economics students are constructing models for how gasoline prices change. Maria's model has very realistic assumptions and is quite complex. Anna's model is less complicated and less realistic. Maria's model correctly predicts gas price increases 5% of the time. Anna's model predicts correctly 15% of the time. On the basis of usefulness or "goodness," Professor will give which student's model the higher grade and why?
A. Maria's model gets the higher grade because it is more realistic. B. Anna's model gets the higher grade because it predicts accurately more often. C. Maria's model gets the higher grade because it is more complex. D. Anna's model gets the higher grade because it is simpler.
A demerit good is a good that __________
Fill in the blank(s) with the appropriate word(s).