Because a price floor causes:
A. a surplus, everyone will be better off.
B. a shortage, rent-seeking will occur.
C. a surplus, some producers may ultimately lose because they won't have enough customers.
D. a shortage, some form of rationing must occur.
Answer: C
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If a decision is made and it is the best choice for society, the decision is said to be
A) a valid economic choice. B) made in self-interest. C) made in social interest. D) consist with scarcity. E) a want-maximizing choice.
Use the following general linear demand relation: Qd=680-9P+0.006M-4Pr where M is income and is the price of a related good, R. From this relation it is apparent that the good is:
a. an inferior good b. a substitute for good R c. a normal good d. a complement for good R e. both c and d
To achieve long-run equilibrium in an economy with a recessionary gap, without the use of stabilization policy, the inflation rate must:
A. not change. B. increase. C. decrease. D. either increase or decrease depending on the relative shifts of AD and AS.
Velocity is not constant if
A. the money supply does not depend on the interest rate. B. the demand for money depends on the interest rate. C. the supply of money depends on the interest rate. D. the price level increases as aggregate output increases.