Reference no: EM132194674
1.) Suppose that consumers begin to believe that the price of housing will be lower next period. What will happen in the market for housing as a result of these expectations?
Select one:
a. Investors will buy up all the housing inventory believing they are getting a "deal."
b. Nothing will happen now. Consumers will wait for the price to actually decrease before changing their behavior.
c. Demand for housing will begin to fall now as people postpone their purchase until prices are lower.
d. Demand for housing will increase now as people adjust to the expectation.
2.) A subsidy is a:
Select one:
a. means of shifting the supply curve left.
b. form of tax increase.
c. reverse tax.
d. movement along the supply curve.
3.) One of the biggest problems with centrally planned economies is that:
Select one:
a. central planners have limited information on the true value of the various ways to utilize scarce resources.
b. they typically have higher levels of corruption compared with market economies.
c. workers have little incentive to work for the central planner.
d. they fail to reach economic efficiency because their policies limit global trade.
4.) When the maximum price that can be legally charged is above the market price we say that there is a price floor.
Select one:
True
False
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