The amount of a good sold in a market at a particular price cannot exceed the quantity
A. demanded at that price.
B. supplied at that price.
C. sold when there is a price floor.
D. sold when there is a price ceiling.
Answer: B
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If the government runs a budget deficit to fight a war and there is no Ricardo-Barro effect, what is an impact of the deficit?
A) The quantity of investment increases. B) The real interest rate rises. C) Firms purchase more capital equipment. D) Animal spirits or irrational exuberance is created. E) The quantity of private saving decreases.
The creation of the European Monetary Union in 1999 lowered nominal interest rates in countries like Italy, because:
a. Nations in the European Monetary Union were required to reduce the maturity of their debt issues. b. Each nation now had a solid currency, and the markets knew that the central banks of these nations could create as much money as necessary to repay government debts. c. Markets had more confidence in the European Central Bank than they did in the Bank of Italy. d. All of the above. e. None of the above.