The market demand function for wheat is Qd = 10 - 2P and the market supply function is Qs = 4P - 2, both measured in billions of bushels per year. Suppose the government wants to increase the price of wheat to $3/bushel and they impose a price support program to achieve their goal. How much wheat must the government buy?
A. 10 billion bushels per year
B. 4 billion bushels per year
C. 6 billion bushels per year
D. None
C. 6 billion bushels per year
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The monetarists would expect a tax cut to have a strong effect on output only if the spending increase was
a. financed by a sale of bonds. b. financed by a cut in government spending. c. financed by an increase in the money stock. d. accompanied by a reduction in the deficit.
Which would increase aggregate supply?
a. A decline in productivity b. An increase in business regulation c. A decrease in the capital stock d. Lower business taxes
Every economic model should include money as a variable. This statement is
A) true, because every transaction in the economy uses money. B) true, because the federal reserve is very important. C) false, because some transactions in the economy are accomplished without money. D) false, because a model can get unnecessarily complex if it includes money.
What would be the impact of a virus that infected the Midwestern corn crop?
a. Price of corn increases and the price of wheat decreases b. Price of corn decreases and the quantity of wheat increases c. Quantities of corn and wheat increase d. Quantity of corn decreases and the price of wheat increases