To be binding, a price floor must be set above the equilibrium ...

[stock]

To be binding, a price floor must be set above the equilibrium price.
 a. True
  b. False
  Indicate whether the statement is true or false

Question 2

A 100 billion decrease in government purchases would:
 a. increase AD by 500 billion if MPC = 0.8.
  b. decrease AD by 300 billion if MPC = 2/3.
  c. increase AD by 200 billion if MPC = 0.5.
  d. decrease AD by 40 billion if MPC = 0.4.

[triiciiaa]

Answer to Question 1

True

Answer to Question 2

b