Occurs whenever the quantity supplied is less than the quantity demanded
What will be an ideal response?
shortage
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If the real interest rate is greater than the nominal interest rate in an economy:
A) inflation must be negative in the economy. B) inflation must be positive in the economy. C) inflation must be zero in the economy. D) the nominal interest rate must be equal to zero.
Assuming the price level has not changed, how would an increase in the aggregate demand affect real GDP?
A) It only changes with changes in exports. B) It increases. C) It only changes with changes in imports. D) It decreases.
Diminishing marginal returns occurs when
A) all inputs are increased and output decreases. B) all inputs are increased and output increases by a smaller proportion. C) a variable input is increased and output decreases. D) a variable unit is increased and its marginal product falls.
Which of the following quantities decrease in response to a tax on a good?
a. the equilibrium quantity in the market for the good, the effective price of the good paid by buyers, and consumer surplus b. the equilibrium quantity in the market for the good, producer surplus, and the well-being of buyers of the good c. the effective price received by sellers of the good, the wedge between the effective price paid by buyers and the effective price received by sellers, and consumer surplus d. None of the above is necessarily correct unless we know whether the tax is levied on buyers or on sellers.