Suppose the market clearing price for gasoline is $3.75 per gallon. Now suppose that policy makers pass a law requiring that the maximum price that can be charged is $2.75 per gallon. Such a situation is an example of
A) a price control that will lead to a surplus of gasoline on the market.
B) a price floor that will lead to a shortage of gasoline on the market.
C) a price ceiling that will lead to a shortage of gasoline on the market.
D) a price floor that will lead to a surplus of gasoline on the market.
C
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Valeria is a closed economy, where consumption totals $3 billion, tax payments are $300 million, government spending is $1 billion, and GDP is $5 billion. Private saving amounts to
a. $1.7 billion and Valeria's government runs a budget deficit. b. $1.7 billion and Valeria's government runs a budget surplus. c. $1 billion and Valeria's government runs a budget deficit. d. $1 billion and Valeria's government runs a budget surplus
In the textbook model of endogenous growth, the production function is modeled as
A. Y = AK. B. Y = X. C. Y = S - I. D. Y = C + I + G + NX.