When the government imposes a binding price ceiling on a competitive market, a surplus of the good arises, and sellers must ration the scarce goods among the large number of potential buyers
a. True
b. False
Indicate whether the statement is true or false
False
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If expectations about inflation are adaptive, they are ________
A) formed by looking at the future B) likely to change rapidly C) based on past inflation D) all of the above E) none of the above
In 2009, President Obama and Congress stimulated aggregate demand by
a. increasing taxes and government spending. b. decreasing taxes and government spending. c. increasing taxes and decreasing government spending. d. decreasing taxes and increasing government spending.
Government programs that take money from high-income people and give it to low-income people typically
a. improve economic efficiency by reducing poverty. b. reduce economic efficiency because they distort incentives. c. have no effect on economic efficiency because they both reduce poverty and distort incentives. d. sometimes improve, sometimes reduce, and sometimes have no effect on economic efficiency.
In general, if a consumer good is produced domestically and consumed domestically, a decrease in its price will have which of the following effects?
a. The consumer price index will decrease relatively more than will the GDP deflator. b. The consumer price index and the GDP deflator will decrease by the same amount. c. The consumer price index will decrease relatively less than will the GDP deflator. d. One cannot generalize about the decrease in the consumer price index relative to the decrease in the GDP deflator.