Refer to the information provided in Figure 4.6 below to answer the question(s) that follow.Equilibrium in this market occurs at the intersection of curves S and D.
Figure 4.6Refer to Figure 4.6. The area of [A + B + C] represents
A. consumer surplus plus producer surplus.
B. consumer surplus minus producer surplus.
C. producer surplus.
D. consumer surplus.
Answer: D
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When there is an expansionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; expand B. increase; raise; decline C. decline; lower; decline D. decline; raise; decline
"The unemployment rate is five percent" is an example of a normative statement
Indicate whether the statement is true or false
Economic progress comes primarily through
A) entrepreneurial action directed by competitive markets. B) central planning. C) imposition of trade barriers. D) government investment in heavy industry.
If people (who used to neither borrow nor save) are now saving for their retirement, then this will cause the equilibrium interest rate
A. to fluctuate wildly. B. to fall. C. to remain constant. D. to rise.