Use the figure below to answer the following question.
If the output level is Q1, then there is missing surplus indicated by the area
A. 0abe.
B. ecf.
C. 0eQ1.
D. bce.
Answer: D
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The LM curve represents combinations of income and the interest rate at which
A) money demand equals money supply when the money supply is fixed. B) money supply equals money demand when the money demand is fixed. C) money demand equals money supply when the money supply can vary. D) money supply equals money demand when both the money supply and money demand can vary.
The ECB now frequently uses ________ to inject reserves into the banking systems of countries that use the Euro.
A. an outright sale of securities. B. an outright purchase of securities C. repurchase agreements D. discount loans
If Ep is 2500 and Y is 3000, then
A) planned inventory accumulation is 500. B) planned inventory depletion is 500. C) unplanned inventory accumulation is 500. D) unplanned inventory decumulation is 500.
If a monopolist is producing at a point at which marginal revenue is greater than marginal cost, then it should:
a. continue producing at the current level. b. raise its prices. c. lower its prices. d. increase the level of production. e. decrease the level of production.