Producer surplus is the:
a. amount by which the quantity supplied of a good exceeds the quantity demanded of a good.
b. measure of producers' willingness to sell a good plus the price of the good.
c. measure of how much producers value a good.
d. amount consumers actually pay for a good minus the amount the sellers are willing to sell the good.
d
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The table above gives data for the nation of Pearl, a small island in the South Pacific. If aggregate demand increases so that the quantity of real GDP demanded is $6 billion more at each price level, the new equilibrium real GDP is ________, and the nation is now experiencing a(n) ________.
A) $22 billion; inflationary gap B) $22 billion; recessionary gap C) $28 billion; inflationary gap D) $28 billion; recessionary gap E) $25 billion; equilibrium
An increase in real GDP can shift
A) money demand to the left and increase the equilibrium interest rate. B) money demand to the right and increase the equilibrium interest rate. C) money demand to the right and decrease the equilibrium interest rate. D) money demand to the left and decrease the equilibrium interest rate.
In the market for reserves, if the federal funds rate is between the discount rate and the interest rate paid on excess reserves, a ________ in the reserve requirement ________ the demand for reserves, raising the federal funds interest rate,
everything else held constant. A) rise; decreases B) rise; increases C) decline; increases D) decline; decreases
Suppose demand for a good is QD = 100 - P and supply is QS = -20 + P. What is the equilibrium price?
a. 20 b. 40 c. 60 d. 80