Another term for excess supply is shortage
Indicate whether the statement is true or false
False
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An increase in the aggregate expenditures schedule ________.
A. decreases aggregate demand by the amount of the increase in aggregate expenditures B. increases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier C. decreases aggregate demand by the amount of the initial increase in aggregate expenditures times the multiplier D. increases aggregate demand by the amount of the increase in aggregate expenditures only
We assume that in the short run in a perfectly competitive market the:
A. number of firms is fixed. B. total quantity supplied is fixed. C. price is fixed. D. All of these are true of the short run.
When the supply elasticity of a product is 2.5, a 10 percent decrease in price will _____ the quantity supplied of the product by _____ percent
a. increase; 25 b. decrease; 25 c. increase; 2.5 d. decrease; 2.5 e. decrease; 4
Business firms are prohibited by law from borrowing money from banks
a. True b. False Indicate whether the statement is true or false