An increase in price increases consumer surplus
a. True
b. False
Indicate whether the statement is true or false
False
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The self-correcting tendency of the economy means that rising inflation eventually eliminates:
A. unemployment. B. exogenous spending. C. recessionary gaps. D. expansionary gaps.
In a perfectly competitive industry, i. entry by new firms shifts the market supply curve rightward. ii. exit by existing firms shifts the market supply curve leftward. iii. at all times existing firms make only zero economic profit
A) ii and iii B) ii only C) i and iii D) i and ii E) i, ii, and iii
Low inflation is also better than _________ , which occurs with severe recessions.
a. hyperinflation b. hypoinflation c. deflation d. stagnation
Figure36-9
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In Figure 36-9, the C + I + G + (X? IM)1 line is flatter than the C + I + G + (X? IM)0 line because the
A. (X? IM)1 line indicates that net exports decline as GDP rises. B. (X? IM)1 line indicates that net exports rise as GDP rises. C. multiplier is greater for the (X? IM)1 line. D. (X? IM)1 line indicates that tariffs, quotas, and other trade barriers are keeping net exports below their full potential.