If there is a shortage of product X, and the price is free to change:
A. fewer resources will be allocated to the production of this good.
B. the price of the product will rise.
C. the price of the product will decline.
D. the supply curve will shift to the left and the demand curve to the right, eliminating the
shortage.
Answer: B
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Which of the following describes the Volcker disinflation most accurately?
a. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. b. Almost all of the public believed that the Fed would keep money growth low, so unemployment rose more than it would have otherwise. c. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose less than it would have otherwise. d. Much of the public did not believe that the Fed would keep money growth low, so unemployment rose more than it would have otherwise.