In the above figure, a rent ceiling of $500 per month would
A) not affect the equilibrium quantity.
B) create a shortage.
C) raise the rent and cause a surplus.
D) reduce the rent and create a surplus.
A
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The assumption of transitive preferences implies that indifference curves must:
A) not cross one another. B) have a positive slope. C) be L-shaped. D) be convex to the origin. E) all of the above
When a good has a unitary price elasticity, consumer expenditures for the good
A) change in the same direction as a price change. B) change in the opposite direction to a price change, but not necessarily by the same percentage as the price change. C) do not change when the price of the good decreases. D) change in the opposite direction and by the same percentage as any price change.
Who benefits when the exchange rate of Japanese yen per dollar increases?
a. Japanese exporters b. Japanese tourists c. Japanese importers d. American exporters e. Japanese students in the U.S. whose source of income is money sent to them from Japan.
What will happen if a country uses money creation to finance a large and expanding national debt?
a. Real output and employment will grow rapidly. b. Nominal interest rates will fall. c. The foreign exchange value of the currency will increase. d. The rate of inflation will rise.