A price below the equilibrium price will:
A) result in pressure for price to rise.
B) result in a surplus.
C) never be the case.
D) result in pressure for price to fall.
Ans: A) result in pressure for price to rise.
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Assume a contractionary monetary policy causes real interest rates in the US to increase relative to Japan. In the short run, the value of the US dollar, the value of the Japanese yen, and the US balance of trade will most likely change in which of the following ways?
a. appreciate; appreciate; move toward deficit b. appreciate; depreciate; move toward deficit c. appreciate; depreciate; move toward surplus d. depreciate; depreciate; move toward surplus e. no change; appreciate; move toward deficit
A firm that generates pollution is illustrated in Figure 9.7. If the government imposes a pollution tax equal to P1, the marginal benefit to the firm of abating A2 is:
A. P1. B. P2. C. P1 - P2. D. P2 - P3.