Excess demand generally causes prices to fall.
Answer the following statement true (T) or false (F)
False
Excess demand generally means that buyers want to buy more than sellers are prepared to supply in a given market, creating pressure on prices to rise.
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How would the following events affect the market demand for laser printers?
a) A recession in the economy leading to a fall in income levels b) A five-fold increase in the price of printing paper What will be an ideal response?
The economy pictured in the figure below has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; B B. recessionary; C C. recessionary; A D. expansionary; A
Which is an example of a good with an elastic supply?
a. beef b. bananas c. lumber d. click-top pens
Decreased investment spending in the economy would be a possible result of
A) an open market sale of bonds by the Fed. B) an increase in the money supply. C) an open market purchase of bonds by the Fed. D) a decrease in interest rates.