In Macroland there is $12,000,000 in currency. The public holds half of the currency and banks hold the rest as reserves. If ban
1 answer:
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Answer:
the black market price stays more or less the same in the long run as in the short run.
Explanation:
The black market price may increase or decrease depending on the price elasticity of the goods or services involved, there is no general economic rule that defines how black market equilibrium price reacts to changes in the supply and demand of legal goods and services.
In this specific case, both the demand elasticity and the supply elasticity are elastic, so they basically cancel out or offset each other. The black market supply will decrease the shortage, but it will not be able to satisfy the new quantity demanded completely. Black market apartments have a greater elasticity (steeper curves).
