If imports increased by $100 million while GDP remained the same, which of the following could have occurred, all else being the same?
a. Exports decreased by $100 million.
b. Consumption increased by $100 million.
c. Government spending decreased by $100 million.
d. Net exports increased by $100 million.
e. Private investment decreased by $100 million.
B
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Refer to the market diagram. Of the surplus that the consumers lose because there is a monopoly (and not perfect competition), how much has become deadweight loss?
The following questions refer to the accompanying market diagram. PC and QC are the equilibrium price and quantity if the firm behaves competitively, and PM and QM are the equilibrium price and quantity if the firm is a simple monopoly.
a. Area E
b. Area H
c. Area E + H
d. Area C + D + H
If there is a recession, the Fed would most likely:
a. encourage banks to provide loans by lowering the discount rate. b. encourage banks to provide loans by raising the discount rate. c. restrict bank lending by lowering the discount rate. d. restrict bank lending by raising the discount rate. e. restrict bank lending by lowering the federal funds rate.
Consider a good with a price elasticity equal to 1 at every point on its demand curve. Which of the following statements is correct?
a. Total revenue always rises exactly in proportion to a drop in the price. b. Total revenue always rises exactly in proportion to a rise in the price. c. Total revenue does not change if the price changes. d. Total revenue drops to zero whenever the price rises. e. Total revenue always doubles if the price drops.
The difference between GNP and GDP is explained by:
(a) Exports and imports; (b) The level of investment; (c) Net factor income from abroad; (d) None of the above.