If a price ceiling were established above the equilibrium price,
A) it would have no effect on the quantity demanded.
B) it would create a shortage.
C) it would create a surplus.
D) none of the above.
A
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If the nominal interest rate is 10 percent, the inflation rate is 6 percent, and the tax rate on interest income is 25 percent, what is the after-tax real interest rate?
A) 1.5 percent B) 4.0 percent C) 3.0 percent D) 6.0 percent E) 3.5 percent
A positive statement is
A) about what ought to be. B) about what is. C) the result of a model's normative assumptions. D) valid only in the context of a model with simple assumptions.
Which of the following is not a result of imposing a rent ceiling?
A) There is a reduction in the quantity of apartments supplied. B) The marginal benefit of the last apartment rented is greater than the marginal cost of supplying it. C) There is an increase in the quantity of apartments demanded. D) Some consumer surplus is converted to producer surplus.
If labor demand rises faster than labor supply, it is expected that real wages will ____
a. stay the same b. decrease c. increase d. Not enough information is available to determine the impact on real wage rates.