An excess supply of money in the economy implies an excess demand for
a. stocks
b. mortgages
c. consumer nondurables
d. consumer durables
e. bonds
E
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If real GDP is less than potential GDP, the economy is
A) not in macroeconomic equilibrium. B) at full employment. C) in an above-full-employment equilibrium. D) in a below-full-employment equilibrium.
Max Shreck, an accountant, quit his $80,000-a-year job and bought an existing tattoo parlor from its previous owner, Sylvia Sidney. The lease has five years remaining and requires a monthly payment of $4,000
Max's explicit cost amounts to $3,000 per month more than his revenue. Should Max continue operating his business? A) If Max's marginal revenue is greater than or equal to his marginal cost, then he should stay in business. B) Max should continue to run the tattoo parlor until his lease runs out. C) Max's explicit cost exceeds his total revenue. He should shut down his tattoo parlor. D) This cannot be determined without information on his revenue.
The size of a deadweight loss in a market is reduced by
A) market price being close to marginal cost. B) government legislating a ceiling price. C) government legislating a price floor. D) creative destruction.
Many state governments use lotteries to raise revenue. If a lottery is viewed as a tax, is it most likely a progressive tax or a regressive tax?
What information would you need to determine whether the burden of a lottery is progressive or regressive?