Potential GDP is always greater than real GDP in an economy
Indicate whether the statement is true or false
FALSE
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A decrease in government spending will cause a(n) ________.
A. decrease in aggregate demand B. increase in aggregate demand C. decrease in the quantity of real output demanded D. increase in the quantity of real output demanded
It is difficult for a private market to provide the economically efficient quantity of a public good because
A) by law governments cannot use cost-benefit analysis to determine this quantity. B) it is too expensive to produce the necessary amount of the good. C) individual preferences are not revealed in the market for the good. D) public goods produce positive and negative externalities.
A sign that Country A is under pressure to devalue its currency is its:
a. Overall balance is in surplus. b. Financial account is in deficit. c. Overall balance is in deficit. d. Reserves account is in deficit (i.e., negative). e. All of the above.
Figure 18-1
According to the graph in Figure 18-1, the increase in the amount that consumers pay as a result of the tax is
A. 1,000.00 B. 600 C. 400 D. indeterminate.