What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?
What will be an ideal response?
The equilibrium quantity unambiguously increases. The effect on the equilibrium price is ambiguous. The equilibrium price rises if the increase in demand exceeds the increase in supply. The equilibrium price falls if the increase in supply exceeds the increase in demand. The equilibrium price is unchanged if the increase in demand equals the increase in supply.
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A monopoly produces a product ________ and there ________ barriers to entry into the market
A) identical to its many competitors; are B) with no close substitutes; are C) identical to its many competitors; are no D) with no close substitutes; are no E) slightly different from those of its many competitors; are
When the price level rises, the real interest rate ________ and the quantity of real GDP demanded ________
A) rises; increases B) rises; decreases C) falls; increases D) falls; decreases E) does not change; does not change
A majority of the commercial banks in the United States are not members of the Fed
a. True b. False Indicate whether the statement is true or false
The aggregate demand curve sloping downward can be explained in part through:
A. the wealth effect. B. the negative relationship between the price level and government spending. C. the positive relationship between the price level and net exports. D. All of these are true.