A price ceiling will be binding only if it is set
a. equal to the equilibrium price
b. above the equilibrium price.
c. below the equilibrium price.
d. either above or below the equilibrium price.
c
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The importance of the ceteris paribus assumption is that it: a. allows one to separate normative economic issues from positive economic ones
b. allows one to generalize from the whole to the individual. c. allows one to analyze the relationship between two variables apart from the influence of other variables. d. allows one to hold all variables constant so the economy can be carefully observed in a suspended state.
Government expenditures on goods and services have an indirect impact on the aggregate demand, while taxes have a direct impact
a. True b. False Indicate whether the statement is true or false
Market failure occurs when
a. an optimal allocation of society's resources is not achieved b. negative externalities are taken into consideration c. positive externalities are taken into consideration d. government failure is at its worst e. all social costs are included in the prices of goods and services
When the dollar appreciates, U.S
a. net exports rise, which increases the aggregate quantity of goods and services demanded. b. net exports rise, which decreases the aggregate quantity of goods and services demanded. c. net exports fall, which increases the aggregate quantity of goods and services demanded. d. net exports fall, which decreases the aggregate quantity of goods and services demanded.