Which of the following statements differentiates between a shortage and a surplus?
A) A shortage occurs when price is held at the equilibrium price, but a surplus occurs when price is held above the equilibrium price.
B) A shortage occurs when price is held below the equilibrium price, but a surplus occurs when price is held at the equilibrium price.
C) A shortage occurs when quantity supplied exceeds quantity demanded, whereas a surplus occurs when quantity demanded exceeds quantity supplied.
D) A shortage occurs when quantity demanded exceeds quantity supplied, whereas a surplus occurs when quantity supplied exceeds quantity demanded.
D
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If you deposit $500 into a savings deposit, the immediate effect (do not consider the money multiplier which we will study in the next chapter) is:
a. M1 rises, M2 falls, and the monetary base remains the same. b. M1 falls, M2 remains the same, and the monetary base remains the same. c. M1 rises, M2 rises, and the monetary base remains the same. d. M1, M2, and the monetary base rise. e. M1, M2, and the monetary base fall.
In a closed economy, if taxes fall and consumption rises, then private saving must fall
a. True b. False Indicate whether the statement is true or false