Use the figure below to answer the following question.
At equilibrium, economic surplus is
A. 200.
B. 350.
C. 150.
D. 700.
Answer: B
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
In response to an unanticipated easing of monetary policy, output ________ at first, then ________ after about four months
A) rises; returns most of the way to its original value B) falls; returns most of the way to its original value C) remains roughly unchanged; rises significantly D) remains roughly unchanged; falls significantly
Theoretically, a tariff imposed to protect an infant industry should be removed
a. within five years. b. when the industry becomes sufficiently diversified. c. when prices charged reflect production costs. d. when the industry has matured.
The following are commonly-used arguments for protection against imports, except:
A. Self-sufficiency and diversification-for-stability B. Protection against dumping C. Infant industry protection D. Price- and profit-maintenance