If the Price of a Dozen Eggs Were Fixed Above

question 63

Multiple Choice

If the price of a dozen eggs were fixed above the current price,then we would expect

• A) an increase in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
• B) an increase in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.
• C) a decrease in the number of eggs people want to buy and an increase in the number of eggs farmers want to sell.
• D) a decrease in the number of eggs people want to buy and a decrease in the number of eggs farmers want to sell.

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Definitions:

Discretionary Economic Policy

Economic policies that are based on the judgment and decisions of policymakers rather than set by predefined rules or automatic mechanisms.

Keynesians

Adherents to the economic theories of John Maynard Keynes, emphasizing the importance of total spending in the economy and government interventions to stabilize economic cycles.

Classical Economists

Early economic theorists who focused on the forces of supply and demand, competition, and free markets as the drivers of economic prosperity.

Monetarists

Economists who emphasize the role of governments in controlling the amount of money in circulation as the primary method for stabilizing the economy and combating inflation.