Suppose that the equilibrium price of pickles falls while the equilibrium quantity rises. The most likely explanation for these changes is:
A. a decrease in demand for pickles.
B. a decrease in the supply of pickles.
C. an increase in demand for pickles.
D. an increase in the supply of pickles.
Answer: D
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The above figure shows the market for college education in the United States. With no government intervention, the unregulated market equilibrium is ________ because education generates ________
A) efficient; positive external benefits B) inefficient; positive external benefits C) inefficient; positive external costs D) efficient; positive external costs E) inefficient; public goods
A decrease in a broad index of commodity prices suggests to the Fed that
a. money is plentiful, and the Fed should conduct restrictive policy. b. money is plentiful, and the Fed should conduct expansionary policy. c. deflation is a potential future danger, and the Fed should conduct expansionary policy. d. future prices will likely increase, and the Fed should conduct expansionary policy.
Can central bankers set short-term interest rate targets and still control inflation in the long run or are these goals mutually impossible? Explain.
What will be an ideal response?
During the peak phase of a business cycle, a business could be expected to have
A. high prices. B. reduced sales. C. low profits. D. staff reductions.