The table shows the aggregate demand and aggregate supply schedule for a hypothetical economy.Real Domestic Output Demanded (in Billions)Price Level (Index Value)Real Domestic Output Supplied (in Billions)$3,000350$9,0004,0003008,0005,0002507,0006,0002006,0007,0001505,0008,0001004,000Refer to the above table. The equilibrium price level and quantity of real domestic output will be:
A. 200 and $6000.
B. 300 and $8000.
C. 250 and $7000.
D. 200 and $5000.
Answer: A
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Which of the following statements about international trade restrictions is true?
a. They ensure that only efficient producers survive. b. They ensure that countries specialize only in those products that they can produce most efficiently. c. They harm domestic consumers in the majority of cases. d. They typically benefit foreign producers at the expense of domestic consumers. e. They ensure that higher-quality goods are provided at lower prices.
If at a given real interest rate desired national saving is $140 billion, domestic investment is $90 billion, and net capital outflow is $60 billion, then at that real interest rate in the loanable funds market there is a
a. surplus. The real interest rate will rise. b. surplus. The real interest rate will fall. c. shortage. The real interest rate will rise. d. shortage. The real interest rate will fall.
An unregulated natural monopoly is most likely to
A. Produce where marginal cost equals price. B. Take advantage of the concept of marginal cost pricing. C. Earn an economic profit. D. Charge a lower price than if the same product were produced in a competitive market because of the monopolist's greater technical efficiency.
If rice is an inferior good, a decrease in income will
A. cause rice to sell at a lower price. B. increase the production of rice. C. shift the demand curve for rice to the left. D. shift the demand curve for rice to the right.