If a government-imposed price floor legally sets the price of milk above market equilibrium, which of the following will most likely happen?
a. The quantity of milk demanded will increase.
b. The quantity of milk supplied will decrease.
c. There will be a surplus of milk.
d. There will be a shortage of milk.
c
You might also like to view...
When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
Farmer Seth has a perfectly flat long-run average total cost curve over the range of output from 10,000 bushels of wheat to 100,000 bushels of wheat. Hence, over this range of output, Farmer Seth definitely experiences
A) constant marginal returns. B) constant returns to scale. C) constant economies of scale. D) none of the above.
Monetarists use the equation of exchange to predict the effects of changes in M on
a. velocity. b. nominal GDP. c. real GDP. d. the price level.
Inflation and unemployment both increase as the money supply increases
a. True b. False Indicate whether the statement is true or false