What is the difference between a price ceiling and a price floor? Compared to the competitive equilibrium price, where must price ceilings and price floors be set to have an effect on the market
What will be an ideal response?
A price ceiling is a legally determined maximum price that sellers may charge for a good or service. A price floor is a legally determined minimum price that sellers may receive for a product or service. To have an effect on a market, price ceilings must be set below the competitive equilibrium price, and price floors must be set above the competitive equilibrium price.
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Assume a simplified banking system in which all banks are subject to a uniform reserve requirement of 20 percent and checkable deposits are the only form of money. A bank that received a new checkable deposit of $10,000 would be able to extend new loans up to a maximum of
A. $2,000.
B. $8,000.
C. $9,000.
D. $10,000.
As output increases, average total cost decreases
A) constantly. B) as the average product of labor decreases. C) initially and then starts to increase. D) in the long run and the short run. E) as long as average fixed cost decreases.
The U.S. economic data for the last 50 years indicates that
A) there is an inverse relationship between unemployment rate and inflation rate. B) there is a direct relationship between unemployment rate and inflation rate. C) during recessions the unemployment rate was always twice as high as the inflation rate. D) there has been no long-run relationship between unemployment and inflation rates.
If governments operated like businesses, meaning their goal was to maximize profits, why would they likely never give up the power to print money to any other institution?
What will be an ideal response?