What is the effect on the price and quantity of a product if both the demand and supply simultaneously increase?
What will be an ideal response?
The equilibrium quantity unambiguously increases. The effect on the equilibrium price is ambiguous. The equilibrium price rises if the increase in demand exceeds the increase in supply. The equilibrium price falls if the increase in supply exceeds the increase in demand. The equilibrium price is unchanged if the increase in demand equals the increase in supply.
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If the inflation rate is 3 percent and the real interest rate is 3 percent, then what is the nominal interest rate?
What will be an ideal response?
What is the term that describes a situation in which one party to an economic transaction has less information than the other party?
A) monopsony B) asymmetric information C) inefficient market hypothesis D) unequal market structure