Over what range of prices does a shortage arise? What happens to the price when there is a shortage?
What will be an ideal response?
A shortage arises at market prices below the equilibrium price. A shortage causes the price to rise, decreasing quantity demanded and increasing quantity supplied until the equilibrium price is attained.
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As a general rule, free trade:
A. increases the supply of factors of production that are domestically abundant. B. increases demand for factors of production that are domestically abundant. C. decreases the supply of factors of production that are domestically scarce. D. decreases the demand for factors of production that are domestically abundant.
One effect of market intervention is resource misallocation
a. True b. False Indicate whether the statement is true or false
The time it takes the Fed to formulate a policy is referred to as:
A. the inside lag for monetary policy. B. the inside lag for fiscal policy. C. the outside lag for monetary policy. D. the outside lag for fiscal policy.
The rate of return on a bond is the
A. Annual interest payment. B. Federal funds rate. C. Discount rate. D. Yield.