Figure 9-2
The output of the economy depicted in is
a.
equal to the full-employment output.
b.
greater than the full-employment output.
c.
less than the full-employment output.
d.
not sustainable in the long run.
a
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Based on the model of the money market, if the Federal Reserve increases the reserve requirement, the equilibrium interest rate should
A) stay the same. B) increase. C) decrease. D) increase to the same extent that the demand for money increases.
In the economic sense, almost everything is scarce. ________ of a good or service occurs when the quantity demanded is greater than the quantity supplied at the current market price
A) Scarcity B) A shortage C) A surplus D) An overstock
The problem of asymmetric information that brings about a general decline in product quality in an industry is
A. the lemons problem. B. a market failure. C. the result of government regulation. D. creative response.
Paul goes to Dick's Sporting Goods to buy a new tennis racquet. He is willing to pay $200 for a new racquet, but buys one on sale for $125. Paul's consumer surplus from the purchase is
A) $325. B) $200. C) $125. D) $75.