If the quantity of money demanded exceeds the quantity supplied, the
A. interest rate will fall.
B. demand-for-money curve will shift to the right.
C. interest rate will rise.
D. supply-of-money curve will shift to the left.
Answer: C
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In an unregulated market for healthcare, there is
A) a deadweight loss from over-providing healthcare. B) a deadweight loss from under-providing healthcare. C) no deadweight loss. D) Any of the above could be correcting depending on how the marginal cost paid by producers compares to the marginal social cost.
A liability rule:
A. involves the use of taxes or fees to remedy negative externalities. B. involves the use of subsidies to remedy negative externalities. C. is a legal principle requiring a party who takes an action that harms others to compensate the affected parties for some or all of their losses. D. requires that victims of an externality pay a tax to the producers of the externality.
Suppose the real money demand function is Md/P = 2400 + 0.2Y - 10,000 (r + ?e). Assume M = 4000, P = 2.0, ?e = .03, and Y = 5000. The real interest rate that clears the asset market is
A) 3%. B) 6%. C) 11%. D) 14%.
Suppose there is a 6 percent increase in the price of good X and a resulting 6 percent decrease in the quantity of X demanded. Price elasticity of demand for X is
a. 0. b. 1. c. 6. d. 36.