Refer to the diagram of the market for money. Given D m and S m , an interest rate of i 3 is not sustainable because the:
A. supply of bonds in the bond market will decline and the interest rate will rise.
B. supply of bonds in the bond market will increase and the interest rate will decline.
C. demand for bonds in the bond market will decline and the interest rate will rise.
D. demand for bonds in the bond market will rise and the interest rate will fall.
D. demand for bonds in the bond market will rise and the interest rate will fall.
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If the government implements a price ceiling on insulin, this will have all of the following effects on the market for insulin except
A) an increase in deadweight loss. B) a decrease in producer surplus. C) a more efficient equilibrium. D) a decrease in economic surplus.
Suppose an economy is in equilibrium. Also suppose that consumer expectations change as the threat of war increases the likelihood of an increase in taxes. This would result in:
a. an increase in equilibrium income. b. no change in equilibrium income. c. a downward shift of the aggregate supply curve. d. a decrease in equilibrium income. e. a change in the slope of the aggregate supply curve.