A price ceiling set above the equilibrium price causes a surplus in the market
a. True
b. False
Indicate whether the statement is true or false
False
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The supply-side effects of an income tax cut ________ potential GDP and ________ aggregate supply
A) increases; do not change B) increase; increase C) decrease; increase D) decrease; decrease E) increase; decrease
Evidence from the time period 1960-1980 indicates that inflation in the United States resulted from
A) an employment target that was set too high. B) the government's inability to sell bonds to the Fed. C) an expansion in the money supply to finance federal government expenditures. D) the excessive sale of government bonds to the public.
If protective import-restricting tariffs are imposed by a country, in the majority of cases that nation's producers end up
A) receiving a higher price for the good than they otherwise would. B) receiving a lower price for the good than they otherwise would. C) producing less of the good than they otherwise would. D) receiving a lower profit for the domestic good than they otherwise would.
Given a supply curve that is positively sloped and a demand curve for a normal good that is negatively sloped, an increase in income will most likely result in:
A) an increase in price and quantity. B) a decrease in price and an increase in quantity. C) a decrease in both price and quantity. D) an increase in price and a decrease in quantity.