If a government limits interest rates to a level below equilibrium, how do savers and investors respond? How is the discrepancy resolved?
What will be an ideal response?
This is straight economics. Interest rate ceilings result in a quantity of funds demanded that exceeds the quantity supplied. The discrepancy is resolved through non-market rationing, on the basis of development policy or favoritism or both.
Economics
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The above figure shows the market for blouses. The government decides to impose the sales tax on sellers, as shown in the figure. The tax decreases consumption by
A) 1,000 blouses. B) 2,000 blouses. C) 3,000 blouses. D) 4,000 blouses.
Economics
For investors, commercial paper is a close substitute for
A) U.S. Treasury bills. B) U.S. Treasury bonds. C) corporate bonds. D) municipal bonds.
Economics