Tariffs result in a decrease in consumer surplus because:
a. the price and the quantity consumed of the protected good increases
b. the price and the quantity consumed of the protected good decreases.
c. the price of the protected good increases and quantity consumed decreases.
d. the price of the protected good decreases and quantity consumed increases.
c
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Use the following figure to answer the next question.
Suppose the economy is currently at full employment with aggregate demand curve AD2. A further increase in consumption and investment spending will cause ________.
A. demand-pull inflation, and the new equilibrium output will be more than Q2 B. cost-push inflation, and the new equilibrium output will be less than Q2 C. demand-pull inflation, and the new equilibrium output will be less than Q2 D. cost-push inflation, and the new equilibrium output will be more than Q2
GDP ignores all of the following EXCEPT
A) household production. B) changes in the environment that occur in the production of output. C) the value of leisure time. D) products produced in other countries that are sold in the United States.
A structural stagnation is a:
A. business cycle with smaller fluctuations around the trend. B. business cycle with greater fluctuations around the trend. C. slow expansion that involves slower growth than the previous long run trend. D. business cycle in which unemployment rises during the downturn and rises during the expansion.
Points that lie beneath the production possibilities curve are:
A. unattainable but efficient. B. attainable and efficient. C. attainable but inefficient. D. unattainable and inefficient.