The more the current price exceeds the equilibrium price, the:
A. smaller the resulting shortage will be.
B. smaller the resulting surplus will be.
C. greater the resulting surplus will be.
D. greater the resulting shortage will be.
Answer: C
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If the price of hamburger meat increases by 20 percent and the quantity supplied by meat packing companies increases by 30 percent, what is the price elasticity of supply?
A) 1.65 B) 1.20 C) 0.67 D) 1.50
Under a flexible exchange system, which of the following will most likely cause a nation's currency to appreciate on the foreign exchange market?
a. an acceleration in the nation's inflation rate b. a balance of trade deficit c. a current account deficit d. a decline in the domestic inflation rate
The demand for a luxury good whose purchase would exhaust a big portion of one's income is:
A. perfectly price inelastic. B. perfectly price elastic. C. relatively price inelastic. D. relatively price elastic.
Assume there are no prospective investment projects (I) that will yield an expected rate of return (r) of 25 percent or more, but there are $5 billion of investment opportunities with an expected rate of return between 20 and 25 percent, an additional $5
billion between 15 and 20 percent, and so on. If the real interest rate is 15 percent in this economy, the aggregate amount of investment will be: A. $25. B. $20. C. $15. D. $10.