Question

1. Which of the following statements is true? a. An effective price ceiling reduces the quantity of the good available to consumers, while an effective price floor increases the quantity of the good available to consumers.

b. An effective price floor reduces the quantity of the good available to consumers, while an effective price ceiling increases the quantity of the good available to consumers.

c. Government intervention in markets in the form of effective price ceilings or price floors increases the quantity of the good available to consumers,

d. Government intervention in markets in the form of effective price ceilings or price floors decreases the quantity of the good available to consumers.

Which of the following statements is true?

a. An economy in a recession will have a lower unemployment rate than will the same economy operating in an expansion.

b. In an economic expansion, the unemployment rate decreases while aggregate output

increases.

c. An economy's output level and employment rate move in opposite directions.

d. Answers (b) and (c) are correct.

When households receive income, they can

a.   pay taxes, pay transfer payments, purchase goods and services, and engage in private saving.

b.   pay taxes, receive transfer payments, purchase goods and services, and engage in private saving.

c.   pay taxes, purchase goods and services, and engage in private saving.

d.   pay taxes and receive transfer payments.

The outflow of funds from the financial markets include                                        2

a. funds for private savings to households.

b. funds to finance government purchases of goods and services.

c. funds to foreign borrowers.

d. Answers (a), (b), and (c) are all correct.

e. Answers (b) and (c) are both correct.

Answer 1

1.
The correct answer is a
a. An effective price ceiling reduces the quantity of the good available to consumers, while an effective price floor increases the quantity of the good available to consumers.

An effective price ceiling would reduce the quantity and effective price floor would increase the quantity available.
2.
The correct answer is b.
b. In an economic expansion, the unemployment rate decreases while aggregate output increases.
3.
The correct answer is b.
b. pay taxes, receive transfer payments, purchase goods and services, and engage in private saving.
When households receive income they pay taxes, receive transfer payments, purchase goods and services, and engage in private saving.
4.
The correct answer is b.
e. Answers (b) and (c) are both correct
Funds to finance government purchases of goods and services and funds to foreign borrowers are both outflow of funds from the financial markets.