In a market economy, which of the following will most likely cause a prolonged milk shortage?
a. an increase in the demand for milk
b. an increase in the supply of milk
c. imposition of a price floor above the equilibrium price of milk
d. imposition of a price ceiling below the equilibrium price of milk
D
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If the price of automobiles were to increase substantially, the demand curve for automobiles would most likely
A) shift rightward. B) shift leftward. C) remain unchanged. D) become steeper.
The natural rate of unemployment
a. is a specific unemployment rate that can be a target for the Fed b. changes as the inflation rate changes c. is natural because it does not change from period to period d. is a measure of the quality of the Fed's performance e. changes as the efficiency of job searches change
If consumers view cappuccinos and lattés as substitutes, what would happen to the equilibrium price and quantity of lattés if the price of cappuccinos rises?
a. Both the equilibrium price and quantity would increase. b. Both the equilibrium price and quantity would decrease. c. The equilibrium price would increase, and the equilibrium quantity would decrease. d. The equilibrium price would decrease, and the equilibrium quantity would increase.
The buying and selling of foreign currency by the central bank is a trade policy whose objective is:
A. reducing purchases of assets abroad. B. stabilizing the exchange rate against external shocks. C. stabilizing the interest rate against foreign capital outflows. D. promoting long term economic growth.