If a government imposed price ceiling legally sets the price of beef below market equilibrium, which of the following will most likely happen?
A. The quantity of beef demanded will decrease.
B. The quantity of beef supplied will increase.
C. There will be a surplus of beef.
D. There will be a shortage of beef.
Answer: D
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If a natural monopoly regulatory commission sets a price where marginal cost is equal to demand
A) the firm would earn monopoly profits. B) the firm would incur a loss. C) economic efficiency would not be achieved. D) the firm would break even.
The proponents of adaptive expectations believe that
a. there will be a substantial time lag before people anticipate the effects of a shift to a more expansionary macro-policy. b. macro-policies that stimulate demand and place upward pressure on the general level of prices will temporarily increase output and employment. c. discretionary changes in macro-policy can be made in a manner that will reduce the economic ups and downs of a market economy. d. all of the above are true.
The real GDP data could be properly thought of as
a. an index of our economic well-being. b. a measure of the total wealth of a nation. c. an index of total output or productive activity. d. an index that measures the size of government.
By buying bonds, the Fed decreases the quantity of reserves in the banking system and decreases the money supply.
a. true b. false