In a crop market with a price support above the equilibrium price, the total amount of the subsidy paid to farmers is equal to the
A) quantity of the surplus crop multiplied by the support price.
B) quantity of the crop produced multiplied by the support price.
C) quantity of the crop purchased by domestic users multiplied by the support price.
D) quantity of the surplus crop multiplied by the equilibrium price.
E) quantity of the crop purchased by domestic users multiplied by the equilibrium price.
A
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In order to maintain an undervalued yuan to encourage a trade surplus, the Chinese government must buy dollars and increase the supply of yuan
Indicate whether the statement is true or false
When there is a surplus of a product in a market the:
a. price will rise. b. price must be above the equilibrium price. c. producers will expand output and sales will rise. d. price must be below the equilibrium price.
This graph reflects a Keynesian viewpoint. How would the economy respond to an aggregate demand increase under the classical model?
a. The economy would quickly adjust to a new point of long-run equilibrium where AD2 intercepts LRAS.
b. The shift from AD1 to AD2 would produce a short-run equilibrium point at e2 that differs from E1.
c. The economy would quickly adjust to a new point of long-run equilibrium where AD1 intercepts LRAS.
d. The shift from AD1 to AD2 would also shift LRAS rightward to a new position at RGDP2.
If ________, the short-run AS curve shifts upward over time.
A. actual output exceeds potential output B. actual output is zero C. actual output equals potential output D. actual output is less than potential output