Refer to the graph below. If the output level is Q1, then the sum of the consumer and producer surplus is:
A. bce
B. ac0
C. 0abe
D. 0eQ1
C. 0abe
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When income taxes fall, the supply of labor curve shifts rightward, ultimately leading to the LRAS curve shifting rightward (economic growth)
Indicate whether the statement is true or false
Classical economists believe that
A. money is neutral. B. inflation is determined by wage growth. C. monetary policy should be used to combat recessions. D. an increase in the real money supply affects output.
Which of the following determines equilibrium wages in perfectly competitive labor markets?
a. The government. b. Monopoly employers. c. Where the supply and demand of labor are equal. d. The requirements of a living wage.
Suppose C = 1000 + .9Y, G = 400, I = 100, (X – IM) = 0, and there are no income taxes. If investment falls by 50, equilibrium GDP will
a) fall by 50 b) fall by 5 c) fall by 500 d) fall by 45 e) fall by half its previous value