Deadweight loss:
A. creates efficiency in markets.
B. always occurs in markets.
C. is the loss in producer surplus from a price increase
D. is the difference between the total surplus occurring in a market and the maximum total surplus achievable.
Answer: D
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Refer to Figure 5-7. What is the incremental cost of increasing the quantity of pollution reduction from QB to QE units?
A) the value of the area QBBEQE B) PF × QE C) the value of the area BEF D) PF
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.
Restrictions on imports
A) usually have no permanent effects on an economy. B) is the best way to increase exports. C) protect United States jobs. D) eventually reduce exports.
For the federal deficit to be lowered
A) the federal government must increase its spending and increase net exports. B) the federal government's expenditures must be lower than its tax revenue. C) the Federal Reserve must raise interest rates and lower the required reserve ratio. D) the Federal Reserve must reduce the money supply.