When there is a shortage of a product in an unregulated market, there is a tendency for
A. quantity supplied to decrease.
B. price to fall.
C. quantity demanded to increase.
D. price to rise.
Answer: D
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Holding all else constant, an increase in U.S. real GDP will ________ the supply for dollars in the foreign exchange market and ________ the equilibrium Mexican peso/U.S. dollar exchange rate.
A. decrease; increase B. decrease; decrease C. increase; increase D. increase; decrease
As the economy nears the end of a recession, which of the following do we typically see?
A) increased spending on capital goods by firms B) further decreases in consumer spending C) increasing interest rates D) all of the above
If the price elasticity of supply is 0.75, it would imply that a _____
a. a 100 percent increase in price would increase the quantity supplied by 75 percent b. doubling of the price would increase the quantity supplied by 175 percent c. 50 percent increase in price would increase the quantity supplied by 25 percent d. 75 percent increase in price would increase the quantity supplied by 100 percent e. 120 percent increase in price would increase the quantity supplied by 90 percent
Price reductions will usually result whenever the quantity supplied exceeds the quantity demanded at the current price
a. True b. False Indicate whether the statement is true or false