What is the effect of important restrictions on prices?
a) they cause prices to drop
b) they cause prices to rise
c) they often cause prices to rise steeply and then drop
d) they usually do not have any lasting effect on price
Ans: b) they cause prices to rise
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When the growth rate of the money supply is increased, interest rates will fall immediately if the liquidity effect is ________ than the other money supply effects and there is ________ adjustment of expected inflation
A) larger; fast B) larger; slow C) smaller; slow D) smaller; fast
If disposable income increases by $100 and consumption increased by $85, ceteris paribus, we may conclude that
A) the marginal propensity to consume is 0.85. B) the marginal propensity to consume is 0.15. C) $15 is autonomous consumption. D) a change in disposable income is induced by a change in consumption.