A binding price floor (i) causes a surplus. (ii) causes a shortage. (iii) is set at a price above the equilibrium price. (iv) is set at a price below the equilibrium price
a. (i) only
b. (iii) only
c. (i) and (iii) only
d. (ii) and (iv) only
c
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At the market equilibrium
a. quantity exceeds price b. excess demand equals excess supply (and both are zero) c. price and quantity are equal d. each seller produces at full capacity e. everyone who is represented along the demand curve buys the good
When actual output is less than potential output, there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; decrease B. a recessionary; increase C. an expansionary; increase D. a recessionary; decrease
Graphically inflation shocks shift the ________ and shocks to potential shift the ________.
A. long-run aggregate supply line; short-run aggregate supply line B. aggregate demand curve; long-run aggregate supply line C. aggregate demand curve; short-run aggregate supply line D. short-run aggregate supply line; long-run aggregate supply line
Money serves as a standard of value, which is another way of saying that money functions as
A. a unit of accounting. B. standard of deferred payment. C. a medium of exchange. D. an opportunity cost of investment.