If short-run equilibrium output equals 10,000, the income-expenditure multiplier equals 10, the mpc equals 0.9, and potential output (Y*) equals 9,000, then transfers must be decreased by approximately ________ to eliminate any output gap.
A. 1,000
B. 111
C. 90
D. 100
Answer: B
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What will be an ideal response?
According to the graph shown, if the government decides to restrict trade, a deadweight loss is created equal to area(s):
This graph demonstrates the domestic demand and supply for a good, as well as a quota and the world price
for that good.
A. F and H.
B. DFGH.
C. FGH.
D. G.