Price floors and price ceilings:
A. cause the supply and demand curves to shift until equilibrium is established.
B. both cause shortages.
C. both cause surpluses.
D. interfere with the rationing function of prices.
Answer: D
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In the above figure, for a single-price monopoly the deadweight loss is equal to the area
A) abP1. B) acP2. C) bce. D) bed. E) P1beP3.
Of the following examples, expenditures on ______ will most likely remain stable when the GDP drops.
a. tables b. shirts c. figurines d. sports cars
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A) reduced the bank's required reserves by $25 assuming the reserve ratio is 5 percent. B) reduced the money supply by $500. C) increased the money supply by $500. D) not changed the money supply.