Price floors are typically accompanied by a standard series of symptoms. What are they?
Following are some of the symptoms associated with price floors: A surplus develops as sellers cannot find enough buyers. Where goods, rather than services, are involved, the surplus creates a problem of disposal. To get around the regulations, sellers may offer discounts in disguised?and often unwanted?forms. Regulations that keep prices artificially high encourage overinvestment in the industry. Even inefficient businesses whose high operating costs would doom them in an unrestricted market can survive beneath the shelter of a generous price floor.
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When policy makers take actions in response to or in anticipation of some change in the overall economy, there is
A) passive policy making. B) rationalization policy making. C) rational expectations policy making. D) active policy making.
Refer to Table 25-2. Suppose a transaction changes a bank's balance sheet as indicated in the following T-account, and the required reserve ratio is 10 percent. As a result of the transaction, the bank can make a maximum loan of
A) $0. B) $800. C) $7,200. D) $8,000.
What is a currency board?
What will be an ideal response?
In the bond market, the market equilibrium shows the market-clearing ________ and market-clearing ________
A) price; deposit B) interest rate; deposit C) price; interest rate D) interest rate; premium