Suppose a price ceiling is set above the equilibrium price. Now suppose that policy makers decide to raise the price ceiling. This increase in the price ceiling will cause which of the following to occur?
A) The surplus in the market will increase.
B) The surplus in the market will decrease.
C) The shortage in the market will increase.
D) none of the above
Answer: D
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Which of the following is correct?
a. Nearly all economists believe that unions are bad for the economy as a whole. b. Unionized firms pay wages above the competitive equilibrium level. c. Unions increase the level of employment in unionized firms. d. Unions decrease the level of employment in firms without unions.
Because of free riders, the demand for a public good:
A. does not get expressed in the market, but the good does get produced by private sellers. B. gets expressed in the market, and the good does get produced by private sellers. C. gets expressed in the market, but the good does not get produced by private sellers. D. does not get expressed in the market, and the good does not get produced by private sellers.
Answer the question based on the following price and output data over a five-year period for an economy that produces only one good. Assume that year 2 is the base year.YearUnits of OutputPrice Per Unit18$22103315441855206If year 2 is the base year, the real GDP for year 3 is:
A. $45. B. $60. C. $40. D. $30.
Answer the following questions true (T) or false (F)
1. Prior to the 1930s, the majority of dollars spent by government was spent at the state and local levels. 2. Expansionary fiscal policy involves increasing government purchases or increasing taxes. 3. Contractionary fiscal policy is used to decrease aggregate demand in an attempt to fight rising inflation.