Refer to the above figure. The market clearing price is
A. $2.
B. $6.
C. $8.
D. $10.
Answer: B
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What would cause a bank run?
A) Depositors feel that the bank does not have sufficient assets to cover their deposits. B) Bank managers choose to hold more excess reserves. C) Depositors feel that they are earning too low of a return on their deposits. D) Borrowers feel that they are being charged too high of an interest rate on their loans.
Inflation occurs over time as a result of
A) long-run aggregate supply increasing faster than aggregate demand. B) long-run aggregate supply increasing faster than short-run aggregate supply. C) decreases in aggregate demand. D) aggregate demand increasing faster than long-run aggregate supply.
The assumption that firms attempt to maximize profits will yield good predictions even if firms sometimes pursue other goals.
Answer the following statement true (T) or false (F)
Using real GDP on the horizontal axis instead of real disposable income implies that a marginal propensity to consume 0.6 generates for every additional $100 of real GDP, there is
A. $40 of additional saving and taxes. B. $40 of additional consumption spending. C. $4 of additional saving. D. $60 of additional real disposable income.