If a price above equilibrium is imposed on a market, welfare will increase when the price control is lifted. If a price control is below equilibrium and then is repealed and allowed to rise to equilibrium, welfare in the system will increase.
A. Both statements are false.
B. The first statement is true and the second is false.
C. Both statements are true.
D. The first statement is false and the second statement is true.
Answer: D
You might also like to view...
The immediate impact when the Federal Reserve buys government securities
A) from banks is that the level of bank reserves will decrease. B) from government security dealers is that the level of bank reserves and deposits will increase. C) from government security dealers is that the level of bank reserves will increase and the level of deposits decrease. D) from banks is that the level of deposits will increase but bank reserves will decline.
In the 2000s, the U.S. economy had both a ________ and a ________
A) large trade deficit; large capital inflow B) large trade surplus; large capital inflow C) large trade deficit; high saving rate D) large capital inflow; high saving rate E) large capital inflow; small government budget deficit
Which of the following is true?
A. The role of government grew most rapidly from 1920 to 1933. B. The role of government grew most rapidly during Franklin Roosevelt's Administration from 1960 to 1975. C. The seeds of the expansion of the federal government's economic role were sown during the Nixon Administration from 1933-1945. D. The seeds of the expansion of the federal government's economic role were sown during the Roosevelt Administration from 1933-1945.
According to the Taylor rule, if real GDP rises by 1 percent above potential GDP, the Fed should raise:
A. The supply of money by 10 percent B. The velocity of money by 10 percent C. The natural rate of unemployment from 4 percent to 5 percent D. The Federal funds rate, relative to the current inflation rate, by 0.5 percent