A market consequence of a price floor program is that:
a. a shortage of the product will develop.
b. producers will stop supplying the product.
c. some rationing device must then be instituted.
d. a surplus of the product will develop.
e. there will be an excess demand for the product.
d
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Explain how the labor market and the production function determine potential GDP
What will be an ideal response?
Refer to the above figure. Which of the following points indicates an inefficient use of resources?
A) a B) d C) e D) More information is needed to answer the question.
A Pigovian tax is intended to:
A. counter the effect of a negative externality. B. decrease efficiency in a market. C. decrease total surplus in a market. D. All of these statements are true.
Starting from long-run equilibrium, a large increase in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; higher; potential B. recessionary; higher; potential C. recessionary; lower; lower D. expansionary; higher; higher