In the short run, the aggregate supply curve reacts to:
A. wage warfare.
B. cartels.
C. price ceilings.
D. price changes.
Answer: D
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A perfectly elastic demand curve has a slope of ________ while a perfectly inelastic demand curve has a slope of ________.
A. 0; infinity B. 1; 0 C. 0; 1 D. infinity; 0
With respect to diffusion of responsibility, the diffusion effect is always greater than the size effect
Indicate whether the statement is true or false
The interest-rate-based transmission mechanism assumes that the Fed can stimulate investment by
A) selling bonds. B) buying bonds. C) raising the discount rate relative to the federal funds rate. D) raising the required reserve ratio.
A price ceiling set below an equilibrium price tends to cause persistent imbalances in the market because
a. Quantity demanded exceeds quantity supplied but price cannot rise to remove the shortage. b. Quantity demanded exceeds quantity supplied but price cannot fall to remove the surplus. c. Quantity supplied exceeds quantity demanded but price cannot rise to remove the shortage. d. Quantity supplied exceeds quantity demanded but price cannot fall to remove the surplus.