The above figure shows the demand and supply curves for housing in City B. What would be the effects of a rent ceiling equal to $1000 per month?

A product's price elasticity of demand is likely to be greater

A) if it only has a few substitutes. B) if consumers spend a small proportion of income on the product. C) the less time consumers have to adjust to price changes. D) if the product is a luxury good rather than a necessity. E) Both answers C and D are correct.

When the government's expenditures exceed its tax revenue, the budget

A) has a deficit and the national debt is increasing. B) is balanced and the national debt is increasing. C) has a surplus and the national debt is increasing. D) has a deficit and the national debt is decreasing. E) None of the above because by law the government's expenditures cannot exceed its tax revenue.