When there are price ceilings, _____ tend to develop.
Fill in the blank(s) with the appropriate word(s).
shortages
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When interest rates in the economy fall, the prices of previously issued bonds
a. must fall. b. must change, but may either rise or fall. c. must rise. d. may remain unchanged.
According to the theory of rational expectations, the government can influence output
A. with appropriate fiscal and monetary policy. B. in the short run, but not in the long run. C. without affecting the price level. D. only by making unexpected changes in aggregate demand.
The higher the price elasticity, the
A. less sensitive quantity demanded is to price changes. B. more sensitive price changes are to quantity demanded. C. less sensitive price changes are to quantity demanded. D. more sensitive quantity demanded is to price changes.
Refer to the graph above. If the initial equilibrium interest rate was 5 percent and the money supply increased by $100 billion, then the new interest rate would be:
1 percent 2 percent 3 percent 4 percent