A binding price ceiling i. causes a surplus. ii. causes a shortage. iii. is set at a price above the equilibrium price. iv. is set at a price below the equilibrium price
a. (ii) only
b. (iv) only
c. (i) and (iii) only
d. (ii) and (iv) only
d
You might also like to view...
The self-correcting tendency of the economy means that falling inflation eventually eliminates:
A. exogenous spending. B. recessionary gaps. C. expansionary gaps. D. unemployment.
The curvature of an economy's production possibilities curve represents:
A) an increasing marginal cost of producing both goods. B) an increasing opportunity cost of producing each good. C) diminishing marginal returns to inputs. D) increasing terms of trade between both goods.
Empirical studies find that exchange rates are much more variable than inflation differentials. How can we explain this empirical result?
What will be an ideal response?
In the interest rate parity condition with imperfect substitutes and a risk premium of ?
A) an increased stock of domestic government debt will raise the difference between the expected returns on domestic and foreign currency bonds. B) a decreased stock of domestic government debt will raise the difference between the expected returns on domestic and foreign currency bonds. C) an increased stock of domestic government debt will reduce the difference between the expected returns on domestic and foreign currency bonds. D) an increased stock of domestic government debt will have no effect on the difference between the expected returns on domestic and foreign currency bonds. E) a decreased stock of domestic government debt will have no effect on the difference between the expected returns on domestic and foreign currency bonds.