In the short run, if prices were above equilibrium,
a. excess aggregate demand for goods and services would place downward pressure on prices.
b. excess aggregate supply of goods and services would place upward pressure on prices.
c. excess aggregate demand for goods and services would place upward pressure on prices.
d. excess aggregate supply of goods and services would place downward pressure on prices.
D
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A shoe retailer does not give a bill for shoes purchased from his store and does not report his income correctly to evade taxes. If you pay him $50, ________
A) the GDP of your country will fall B) the GDP of your country will increase C) the trade surplus of your country will increase D) the GDP of your country will remain unchanged
Refer to Table 4.1, which shows Flo's and Rita's individual supply schedules for frozen latte-on-a-stick. Assuming Flo and Rita are the only suppliers in the market, what is the market quantity supplied at a price of $2?
A) 0 B) 2 C) 3 D) 5
Causality (what causes what) is clear and mechanical with the quantity theory of money. If M increases, with
a. V and Q being variable, the price level, P, increases b. V and Q being variable, the price level, P, decreases c. V and Q being constant, the price level, P, increases d. V and Q being constant, the price level, P, decreases e. P and Q being constant, velocity, V, increases
The competitive market price of a good
A. is equal to the value consumers place on the last unit they purchased. B. must reflect both the value to consumers and cost to producers. C. must exceed the cost of producing an extra unit of the good. D. must be less than what consumers are willing to pay for an additional unit of the good.