In order for a price ceiling to "bind," it:
A. must be set below the equilibrium price, and will likely cause a surplus.
B. must be set above the equilibrium price, and will likely cause a surplus.
C. must be set above the equilibrium price, and will likely cause a shortage.
D. must be set below the equilibrium price, and will likely cause a shortage.
Answer: D
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Open market operations are conducted by the Fed
A) in the New York Stock Exchange. B) in the private secondary U.S. securities market. C) through the Washington location of the Federal Reserve's Bank of Governors. D) through the Bureau of Engraving.
Which of the following best describes a steady state?
A) Political stability is maintained by the state. B) The standard of living is increasing at a stable rate. C) Each firm in the economy receives a steady stream of income. D) Output per worker, consumption per worker, and capital per worker are constant.
A differentiated product is one that:
a. is slightly different from the competitor's product, although it is a close substitute. b. is very different. c. is traded within firms and is not for sale in retail markets. d. has a shelf life of less than a year.
The quantity equation states:
A. P × V = M × Y. B. M × Y = P × V C. M × P = Y × V. D. M × V = P × Y.