Deadweight loss refers to the loss in ________
A) producer surplus due to a fall in the market price
B) consumer surplus due to an increase in the market price
C) total surplus due to a market distortion such as an externality
D) total surplus due to a change in consumers' preferences
C
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When the unemployment rate equals the natural unemployment rate, most likely the economy is producing
A) on the production possibilities frontier. B) within the production possibilities frontier. C) beyond the production possibilities frontier. D) either on or within the production possibilities frontier. E) either on or beyond the production possibilities frontier.
What is the significant feature of a preferential arrangement?
What will be an ideal response?
The Lucas critique is an attack on the usefulness of
A) conventional econometric models as forecasting tools. B) conventional econometric models as indicators of the potential impacts on the economy of particular policies. C) rational expectations models of macroeconomic activity. D) the relationship between the quantity theory of money and aggregate demand.
Suppose an appreciation of the French franc causes U.S. prices of French wine imports to rise sharply. On the other hand, Californian wine becomes relatively inexpensive to French consumers. Other things equal, this will result in:
a. an increase in U.S. aggregate expenditures and an increase in the aggregate quantity of U.S. goods and services demanded. b. a decrease in U.S. aggregate expenditures and a decrease in the aggregate quantity of U.S. goods and services demanded. c. an increase in U.S. aggregate expenditures and a decrease in the aggregate quantity of U.S. goods and services demanded. d. no change in either U.S. aggregate expenditures or the aggregate quantity of U.S. goods and services demanded. e. a decrease in U.S. aggregate expenditures and an increase in the aggregate quantity of U.S. goods and services demanded.