If the market price is above the equilibrium price:
A. A shortage will occur and producers will produce more and lower prices
B. A surplus will occur and producers will produce less and lower prices
C. A surplus will result and consumers will bid prices up
D. Producers will make extremely high profits
Answer: B
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Stabilization policy may be necessary to slow down the speed of the adjustment process
a. True b. False Indicate whether the statement is true or false
Activists believe that
A) there is sufficient flexibility in wages and prices to allow the economy to equilibrate at full-employment Real GDP in a reasonable period of time. B) discretionary fiscal policies do not work. C) discretionary monetary policies do not work. D) fine-tuning to smooth out the business cycle is feasible.
Which of the following expenditures would increase the investment component of U.S. GDP?
A. You purchase a new car. B. You purchase 1,000 shares of stock. C. You pay a commission to your stock broker for selling some stocks that you owned. D. You purchase a new house.
Which of the following must occur to achieve large and lasting increases in output?
A. A shift in aggregate supply to the left. B. An increase in the long run aggregate supply curve. C. An increase in the use of existing capacity. D. A commitment to contractionary fiscal policy.