Explain how the price system eliminates a shortage
What will be an ideal response?
A shortage means that quantity demanded is greater than quantity supplied. This will lead to upward pressure on price. As price rises, quantity demanded falls and quantity supplied rises. This will continue until quantity demanded is equal to quantity supplied.
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In the 1980s, the federal government gradually ________ interest-rate ceiling on deposits at commercial banks and thrift institutions, which has ________ the costs of inflation
A) imposed, lowered B) imposed, reduced C) lifted, lowered D) lifted, reduced
Public choice theory indicates that the behavior of people in government
a. differs from the behavior of people in the private sector because they are motivated by the public interest rather than their own personal self-interest. b. differs from the behavior of people in the private sector because public sector decision roles do not allow people to pursue their own self-interests. c. is the same as people in the private sector only if decisions are made by majority vote. d. is best understood by applying the same principles we use to predict the behavior of people in the private sector.
Is demand for electricity more price elastic when measured over a short period of time or a long period of time? Explain.
What will be an ideal response?
As of 2009, what was the last year that U.S. experienced deflation?
A) 1933 B) 1955 C) 1973 D) 1991 E) 2001