If at the prevailing interest rate the quantity of money demanded is $2 trillion, and the supply of money is $1.5 trillion, then which of the following istrue?
a. There is a shortage of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
b. There is a surplus of money, and consequently interest rates must fall in order to achieve an equilibrium in the money market.
c. There is shortage of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
d. There is a surplus of money, and consequently interest rates must rise in order to achieve an equilibrium in the money market.
c
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A minimum wage set above the equilibrium wage rate
A) decreases job rationing. B) decreases the natural unemployment rate because fewer workers will become unemployed. C) increases the natural unemployment rate. D) increases the number of workers employed. E) increases the demand for labor.
If the government levies a specific tax on tobacco producers, the spending of consumers will probably
A) increase. B) decrease. C) remain unchanged. D) depend on supply elasticity.