When a price control pushes the price of a good or resource below the market equilibrium, then
What will be an ideal response?
a shortage of the good will develop.
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In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be
A) less than $450 billion. B) $450 billion. C) between $450 billion and $600 billion. D) greater than $600 billion.
Scaling back the U.S. "war on terror" would:
A. suggest that the United States is allocating less than the optimal amount of resources to the war on terror. B. shift U.S. production from "defense goods" to "civilian goods." C. shift U.S. production from "civilian goods" to "defense goods." D. shift the production possibilities curve inward.
Suppose that investment is not very responsive to interest rates, so that a sizable increase in interest rates has only a minor effect on investment. In this case, monetary policy would have:
A. a massive effect on output. B. no effect on output. C. a modest effect on output. D. a substantial effect on output.
Refer to the table above. Assuming that the market consists of only these three sellers, what is the market supply when the price is $2?
A) 39 units B) 52 units C) 89 units D) 41 units