Which of the following statements about the effects of rent control is correct?
a. The short-run effect of rent control is a surplus of apartments, and the long-run effect of rent control is a shortage of apartments.
b. The short-run effect of rent control is a relatively small shortage of apartments, and the long-run effect of rent control is a larger shortage of apartments.
c. In the long run, rent control leads to a shortage of apartments and an improvement in the quality of available apartments.
d. The effects of rent control are very noticeable to the public in the short run because the primary effects of rent control occur very quickly.
b
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To eliminate built-in inflation from the economy, the Fed must
a. announce its intention to have a single policy objective b. create a recession c. maintain a constant rate of inflation d. resist the temptation to change its interest rate targets e. work closely with Congress and the President
Which of the following phenomena shows that risk aversion is the characteristic of many people?
A. Gambling B. Investing in one stock rather than a portfolio C. Auto insurance D. Looting
Which of the following is not a tool of the Fed?
A) the discount rate B) reserve requirements C) open market operations D) the proportion of money held as currency
Products can be differentiated
A) if the buyers are homogeneous and their number increases. B) by location and by brand name. C) only by brand name. D) none of the above.