Refer to the diagram. Assuming equilibrium price P 1, consumer surplus is represented by areas:
A. a + b.
B. a + b + c + d.
C. c + d.
D. a + c.
Ans: A. a + b.
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All taxes carry which of the following costs?
A. Time in creating procedures for collecting revenues B. Enforcing tax payments C. Managing collected funds D. All taxes incur all of these costs.
What is aggregate demand? What are its major components?
An increase in the reserve ratio would tend to
a. increase excess reserves and raise the money multiplier. b. decrease excess reserves and decrease the money multiplier. c. increase excess reserves and decrease the money multiplier. d. decrease excess reserves and raise the money multiplier.
If autonomous consumption rises by $20 and, as a result, Real GDP rises by $200, then the multiplier is
A) 4. B) 5. C) 6. D) 10. E) none of the above