Which of the following will occur if a legal price floor is placed on a good below its freemarket equilibrium?
What will be an ideal response?
The equilibrium price will ration the good.
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Refer to Table 10.1. Equilibrium real GDP for this economy is equal to
A) $5.75 billion. B) $12 billion. C) $23 billion. D) $46 billion.
Required reserves are the amount of
A) reserves a bank must hold against its deposits as mandated by the Federal Reserve. B) cash a bank must hold against its deposits as mandated by the Federal Reserve. C) checkable deposits a bank must hold against all other deposits as mandated by the U.S. Treasury. D) reserves a bank must hold against all its assets as mandated by the Federal Reserve.
Which one of the following policies mitigates the negative effects of moral hazard?
A. Increasing everyone's insurance premium B. Mandatory car insurance for car owners C. Lowering everyone's insurance premium D. Insurance policies with large deductibles
The heart of the argument against an increase in the minimum wage is that
A. there is a net loss to workers. B. there are workers who earn more than they are worth. C. there is a loss to firms. D. the net gain to workers is less than the loss to firms.