If the price for a good was $5 and the government wanted the price to be $10, it would impose a $5 price floor
Indicate whether the statement is true or false
F
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Consumers will spend a higher proportion of a one-time bonus than they would of a permanent salary increase
Indicate whether the statement is true or false
Assume someone organizes all farms in the nation into a single-price monopoly. As a result, the price consumers pay for food
A) does not change, that is, it remains constant. B) falls. C) rises. D) might rise or fall depending on whether the demand for food is elastic or inelastic. E) might rise or fall depending on whether the monopoly's marginal revenue curve lies above or below its demand curve.
The number by which a change in the monetary base is multiplied to find the resulting change in the quantity of money is called the
A) desired reserve ratio. B) money multiplier. C) currency multiplier. D) currency drain. E) open market operation.
Assume that an economy's income multiplier is 2 and that this economy is in equilibrium at $500 billion. If the government wants to move this economy to full-employment at $600 billion, while maintaining a balanced budget, it must choose which of the following options?
a. increase government spending and taxes by $100 billion b. decrease government spending and taxes by $100 billion c. increase government spending and taxes by $200 billion d. decrease government spending and taxes by $200 billion e. raising the equilibrium level of income while maintaining a balanced budget is impossible