An effective price floor must be set
A. either at or below the equilibrium price.
B. at the equilibrium price.
C. above the equilibrium price.
D. below the equilibrium price.
Answer: C
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In the above figure, in order to promote an efficient allocation of resources, the government could grant a subsidy equal to
A) zero. B) $5 per unit. C) $10 per unit. D) $15 per unit.
You have just read that the Federal Reserve has increased the money supply to avoid a recession. For a given price level, you would expect the LM curve to
A) shift up and to the left as the real money supply falls. B) shift up and to the left as the real money supply rises. C) shift down and to the right as the real money supply falls. D) shift down and to the right as the real money supply rises.
Which of the following is not a common characteristic of IACs?
a. Market-based economies. b. Large stocks of technologically advanced capital. c. Well-educated labor. d. Low per capita energy consumption.
Which of the following would be counted as part of M1?
a. Money market deposit accounts b. Saving deposits c. Mutual funds d. Traveler's checks e. Time deposits