Which of the following is NOT a predictable result of a price ceiling set below the market clearing price?
A. lines to purchase the product
B. excess quantity demanded
C. an illegal market in the good
D. excess quantity supplied
Answer: D
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Starting from long-run equilibrium, a large tax cut will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; higher B. expansionary; higher; potential C. recessionary; higher; potential D. recessionary; lower; lower
If the general level of prices is lower than business decision makers anticipated when they entered into long-term contracts for raw materials and other resources, which of the following is most likely to occur?
a. an economic boom b. highly attractive profit margins c. output less than the economy's long-run potential d. a sharp increase in imports
Slope is calculated as rise / run.
Answer the following statement true (T) or false (F)
Cross elasticity of demand measures the response in
A. the quantity of one good demanded to a change in the price of another good. B. the income of consumers to the change in the price of goods. C. the price of a good to a change in the quantity of another good demanded. D. quantity of one good demanded when the quantity demanded of another good changes.