When there is an excess quantity demanded of a product at the current price, then:
a. the price will tend to fall
b. the price will tend to rise.
c. the price must be above the equilibrium price.
d. producers will reduce output and sales will fall.
b
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The ________ demonstrates the roles played by households and firms in the market system
A) theory of comparative advantage B) business cycle C) circular flow model D) production possibilities frontier
A monopolistically competitive firm can convince buyers that its product has value by differentiating its product to suit consumers' preferences
Indicate whether the statement is true or false
Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Open-market operations change:
A. the size of the monetary multiplier but not commercial bank reserves. B. commercial bank reserves but not the size of the monetary multiplier. C. neither commercial bank reserves nor the size of the monetary multiplier. D. both commercial bank reserves and the size of the monetary multiplier.