The area under the market demand curve shows the _____________ benefit to _____________.
a. total; consumers
b. marginal; consumers
c. total; producers
d. marginal; producers
e. equilibrium; consumers
Ans: a. total; consumers
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Of the following OECD countries, which spends the most on health care when measured as a percentage of GDP?
A) the United Kingdom B) Japan C) Canada D) the United States
A government-sponsored good is often
A) produced by the government. B) subsidized. C) taxed. D) advertised.
Suppose the central bank increases the money supply in an economy unexpectedly during a year. If the current inflation rate in this country is 3.4 percent, then according to new classical economists, the expected inflation rate for the following year would be:
a. 3.4 percent. b. less than 3.4 percent. c. 2.4 percent, because people form their expectations adaptively. d. around 6.8 percent. e. greater than 3.4 percent.
Consider borrowers and lenders who agree to loans with fixed nominal interest rates. If inflation is higher than what the borrowers and lenders expected, then who benefits from lower real interest rates?
A. Only the borrowers benefit. B. Only the lenders benefit. C. Both borrowers and lenders benefit. D. Neither borrowers nor lenders.