Government attempts to lower, raise, or simply stabilize prices can:
A. reduce efficiency of a market.
B. shift the distribution of surplus.
C. create unintended side effects.
D. All of these are true.
Answer: D
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What will be an ideal response?
Suppose that in Germany total annual output is worth $600 million and people work 40 million hours. In France total annual output is worth $700 million and people work 50 million hours. In which country do people enjoy a higher standard of living?
A price ceiling set above the equilibrium price will cause which of the following?
A) an increase in supply B) a surplus C) a shortage D) no effect on either the price or quantity
The liquidity trap illustrated in Figure 15.5 is the result of a
A. Currency that is not serving its function as a store of value. B. Low opportunity cost of money. C. Low demand for cash at low interest rates. D. Fed ceiling on interest rates.