If the government sets the price below the equilibrium price there will be:
a. a shortage
b. a surplus
c. people who buy and are therefore worse off than if they bought at the equilibrium price
d. producers who sell and are therefore better off than if they sold at the equilibrium price
e. none of the above
Ans: a. a shortage
Economics
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Economists attempt to discover explanations for events that are observed.
a. true b. false
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Refer to Figure 15-7. Suppose the Fed sells Treasury Bills in pursuit of contractionary monetary policy. Using the static AD-AS model in the figure above, this situation would be depicted as a movement from
A) B to C. B) B to D. C) C to B. D) C to D. E) A to B.
Economics