Which of the following situations could generate a shortage?
A) Demand for a good increases, resulting in a new higher market clearing price.
B) Demand for a good decreases, resulting in a new lower market clearing price.
C) Demand for a good increases, but the price is not permitted to rise.
D) Demand for a good decreases, but the price is not permitted to fall.
Answer: C
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If the real interest rate is greater than the nominal interest rate in an economy:
A) inflation must be negative in the economy. B) inflation must be positive in the economy. C) inflation must be zero in the economy. D) the nominal interest rate must be equal to zero.
Which of the following accurately describes an effect of Hurricane Harvey on GDP?
A) GDP would decrease reflecting the costs of cleanup. B) GDP would increase reflecting the costs of cleanup. C) GDP would increase reflecting the decrease in production that occurred during the storm and the productive capacity lost in the storm. D) GDP would increase well-being.