A price floor will be binding only if it is set
a. equal to the equilibrium price.
b. above the equilibrium price.
c. below the equilibrium price.
d. either above or below the equilibrium price.
b
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What happens to the demand for loanable funds curve when the economy enters a recession?
A) The demand for loanable funds curve shifts leftward because wealth decreases. B) The demand for loanable funds curve shifts leftward because expected profit falls. C) The demand for loanable funds curve shifts leftward because the real interest rate falls. D) The demand for loanable funds curve shifts rightward because the real interest rate falls. E) The demand for loanable funds curve shifts rightward because expected profit falls.
Foreign exchange market intervention is most effective when:
a. each country's political leaders agree to cooperate fully with the process. b. leading economists in each country concur that intervention is needed. c. permanent differences between the free market exchange rate and the fixed exchange rate are expected. d. temporary differences between the free market exchange rate and the fixed exchange rate are expected. e. all the countries restrict the international movement of goods and services.