We cannot predict the effect on the market clearing price, but know that the equilibrium quantity will decrease when
A) supply increases and demand decreases
B) supply decreases and demand increases.
C) supply and demand for a product simultaneously decrease.
D) supply and demand for a product simultaneously increase.
C
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Prices in resource markets
a. provide users with information concerning the relative scarcity of resources. b. encourage the use of a resource now if its price is expected to rise in the future. c. provide suppliers with little incentive to develop more of those resources that are intensely demanded by users. d. have little impact on productive decisions unless they are closely regulated by the government.
Assume that the economy is in a recession and there is a budget deficit. A strict balanced-budget rule that would require the Federal government to balance its budget during a recession would be:
A. Expansionary and worsen the effects of the recession B. Contractionary and worsen the effects of the recession C. Contractionary and counter the effects of the recession D. Expansionary and counter the effects of the recession