Refer to Scenario 3.2 below to answer the question(s) that follow.SCENARIO 3.2: Lettuce and spinach are substitutes. Lettuce and tomatoes are complements. Lettuce is a normal good. During the winter, about 20% of the lettuce crop was destroyed by flooding.Refer to Scenario 3.2. The government wants to protect consumers from rising food prices. Therefore, price restrictions are imposed on lettuce growers prohibiting them from raising the price of lettuce. This will cause
A. an increase in the demand for lettuce.
B. an excess demand for lettuce.
C. an excess supply of lettuce.
D. a decrease in the supply of lettuce.
Answer: B
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Which of the following is not a reason for the Ricardian equivalence theorem to fail to hold?
A) tax distortions B) people can borrow from the government. C) finite-lived people. D) credit market imperfections.
The Fed is unlike other central banks in that it
a. has 12 branches. b. is completely centralized. c. has no real powers. d. also has control over fiscal policy.
Developing countries have been able to reduce the effect of depreciation on the value of their debt by:
A) issuing debt in U.S. dollars. B) issuing debt in domestic currency. C) appreciating their currency. D) using expansionary fiscal policy.
The process of flaw coordination that economic theory describes is called a "mutual adjustment process" because
What will be an ideal response?