There are never shortages or surpluses when the price in a market is equal to the equilibrium price for the market.
Answer the following statement true (T) or false (F)
True
At equilibrium, the quantity demanded is equal to the quantity supplied.
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Based on the figure below. Starting from long-run equilibrium at point C, a decrease in government spending that decreases aggregate demand from AD1 to AD will lead to a short-run equilibrium at__ creating _____gap.
A. B; no output B. D; an expansionary C. B; recessionary D. D; a recessionary
At any point below the current LM curve there is an
A) excess demand for money. B) excess supply of money. C) excess demand for goods. D) excess supply of goods.
Even though mass transit systems such as buses are available in most cities in the United States, many residents decide to drive to work in their own vehicles because
A) the opportunity cost of riding a bus is too high for them. B) there is no opportunity cost of them to drive. C) they are not aware of the opportunity cost of driving. D) they do not behave according to the economic way of thinking.
The smaller the amount saved out of a change in disposable income, the
A) more horizontal the consumption function. B) larger the MPC. C) more net taxes affect consumption. D) smaller is autonomous consumption. E) smaller the MPC.