Assume an economy is in equilibrium at a real GDP of $5 trillion. If aggregate expenditure (AE) increases by $1 trillion, the economy's equilibrium real GDP is likely to
What will be an ideal response?
increase by more than $1 trillion
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The total welfare cost of a monopoly that engages in rent-seeking activities
a. equals only the portion of lost consumer surplus that is not transferred to the monopolist b. includes the use of resources devoted to rent seeking c. equals the total reduction in consumer surplus d. equals the total economic profit earned by the monopolist e. excludes the use of resources devoted to rent seeking
Unions cannot exert market power without exerting control over the market supply curve for labor.
Answer the following statement true (T) or false (F)
What is the median-voter model and what are two implications from it?
Please provide the best answer for the statement.
Potential GDP is the maximum amount of economic output an economy can sustain at any moment without
A. causing frictional unemployment. B. decreasing the inflation rate. C. increasing the inflation rate. D. raising unemployment levels.