Suppose the equilibrium price of milk is $3 per gallon but the federal government sets the market price at $4 per gallon. The market mechanism will force the milk price back down to $3 per gallon unless the government:
A) rations the excess demand for milk among consumers.
B) buys the excess supply of milk and removes it from the market.
C) Both A and B are plausible actions.
D) The government cannot maintain the price above the equilibrium level.
B
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The minimum price for a good set by the government above the equilibrium price is called a:
a. price ceiling. b. price floor. c. parity price ratio. d. market-generated price. e. deficiency price.
Classical economists believe that an increase in the money supply will lead to
a. a decrease in nominal GDP b. a decrease in real GDP c. a decrease in the price level d. an increase in nominal GDP e. an increase in real GDP
If an investor's primary stock holding is currently Exxon Mobil, the purchase of which of the following stocks would provide the investor with the largest reduction in risk?
a. BP / Amoco. b. Shell Oil Corporation. c. General Motors. d. Texaco.
The mission, vision, and values provide the foundation for the strategic planning process.
a. true b. false