Situation 4-1 During the winter of 1973-74, a general system of wage and price controls (including a price ceiling on gasoline) was in force in the United States. At the beginning of 1974, some oil-producing countries imposed an oil embargo (a legal prohibition on commerce) on the West. In the spring of 1974, price controls were abolished. Refer to Situation 4-1. An economist would have most
likely predicted that the oil embargo imposed in 1974 would result in a
A) leftward shift in the supply (curve) of gasoline.
B) rightward shift in the supply (curve) of gasoline.
C) leftward shift in the demand (curve) for gasoline.
D) rightward shift in the demand (curve) for gasoline.
E) both a and d
A
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For a consumer bound by the collateral constraint, a reduction in the price of the collateral leads to
A) nothing. B) an increase in current consumption and a decrease in future consumption. C) a decrease in current consumption and no change in future consumption. D) a decrease in current and future consumption.
Suppose the United States government is successful in reducing the flow of drugs into the United States. What impact does this have on the supply and demand curves for illegal drugs. a. supply decreases, demand is unaffected, and price increases
b. demand decreases, supply is unaffected, and price decreases. c. demand and supply both decrease, leaving price essentially unchanged. d. supply decreases, demand increases, and price increases substantially.
Which of the following would be added to U.S. national income?
A. An American consumer buying French wine B. An American business selling aircraft to British Airways C. A Swedish firm selling mobile phones to Americans D. A French firm buying a Swedish cellular phone
Regarding the equation of exchange, all of the following are true according to monetarists except
A. Changes in M may cause changes in P. B. A reduction in M can leave real output unaffected. C. The velocity of money is stable. D. In reality, MV does not always equal PQ but it is still incredibly useful.