A shortage exists in the market if
a) there is an excess supply of the good
b) quantity supplied exceeds quantity demanded
c) the current price is below its equilibrium price
d) all of the above are correct
Answer: c) the current price is below its equilibrium price
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Figure 33-6
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Figure 33-6 (b) illustrates that
A. in the short run, it is possible to “ride the Phillips curve” down toward lower rates of inflation. B. in the short run, it is possible to “ride the Phillips curve” up toward lower unemployment by stimulating aggregate demand. C. the Phillips curve connecting points g, e, and r is not a menu of policy choices. D. All of these responses are correct.
An increase in the general level of prices in the goods and services market that is accompanied by a short-run expansion in output is most likely caused by
a. an unanticipated decrease in aggregate demand. b. an unanticipated increase in aggregate demand. c. a favorable supply shock that shifts SRAS to the right. d. an unfavorable supply shock that shifts SRAS to the left.
Recall that a linear demand curve has the form Q = A - BP, where P is price and A and B are positive numbers. Suppose that when price is $5 the amount demanded is 100 and the elasticity of demand is -2. What are the values of A and B?
What will be an ideal response?
Which of the following would cause an increase in interest rates in credit markets?
A. A decrease in business demand for credit B. An increase in the supply of consumer saving C. An increase in the supply of business saving D. An increase in consumer demand for credit