The forces of demand and supply ensure that at equilibrium
A. there are no shortages or surpluses.
B. there are no shortages, but there may be surpluses.
C. there are no surpluses, but there may be shortages.
D. there may be shortages or surpluses.
A. there are no shortages or surpluses.
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Suppose a $1 tax is placed on a good. The more elastic the supply of the good, the
A) larger the increase in the after-tax price. B) smaller the decrease in the quantity sold. C) less of the tax will be paid by the buyers. D) more of the tax will be paid by the sellers.
For every dollar's worth of government securities the Fed sells, the money supply
A) rises by more than $1. B) rises by less than $1. C) falls by less than $1. D) falls by more than $1.
Rational expectations theory is based on all of the following assumptions, EXCEPT
A. that individuals and business firms learn through experience to anticipate the consequences of changes in monetary and fiscal policy. B. that individuals and business firms act instantaneously to protect their economic interests. C. that demand creates its own supply. D. that all resource and product markets are purely competitive.
Technological development:
A. alters the nature of production and consumption. B. does not depend on economic incentives. C. does not depend on institutions. D. makes it impossible to obtain more of the same things.