An economy is experiencing a recessionary gap. The government can ________.
Fill in the blank(s) with the appropriate word(s).
increase expenditure or cut taxes to increase aggregate demand
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What is the value of consumer surplus (CS) and producer surplus (PS) at equilibrium?
Consider the market for a Procter and Gamble biodegradable detergent. Suppose that market demand is QD = 120 – 3P, and market supply is QS = –50 + 2P, where P is the price per case and Q is the quantity in thousands per week.
An oligopoly created because of economies of scale is called a
A) natural oligopoly. B) legal oligopoly. C) public oligopoly. D) monopolistic oligopoly. E) scale oligopoly.
Which of the following is true concerning the impact of tariffs and quotas?
a. Tariffs raise the price of a good but quotas do not. b. Tariffs reduce consumer and producer surplus whereas quotas reduce domestic consumer surplus and increase domestic producer surplus. c. Both tariffs and quotas increase the quantity demanded. d. The revenue resulting from a tariff goes to the government whereas the revenue resulting from a quota goes to whoever is awarded the right to sell the product. e. The potential welfare loss is greater with tariffs than quotas.
The expenditure multiplier applies only to changes in government spending
a. True b. False Indicate whether the statement is true or false