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Unformatted text preview: 14. Gas lines in the 1970s were caused by Price ceilings 15. Statement 1: Price ceilings cause shortages. Statement 2: Interest rates are set by supply and demand, but wage rates are not Statement 1 is true and statement 2 is false 16. If the equilibrium price of corn is $3 a bushel, and the government imposes a floor of $4 a bushel, the price of corn will Increase to $4 17. Usury laws tend to Create a shortage of loanable funds 18. If the price system is allowed to function without interference and a shortage occurs, quantity demand will fall and 1 will rise . 19. A price floor is above equilibrium price and causes surpluses 20. An increase in supply while demand remains unchanged will lead to A decrease in equilibrium price and an increase in equilibrium quantity 21. A decrease in demand while...
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This note was uploaded on 03/18/2008 for the course ECON 202 taught by Professor Amsler during the Spring '08 term at Michigan State University.
- Spring '08