If a perfectly competitive market is in equilibrium and market demand decreases, which of the following would happen?
a. both producer and consumer surplus would increase
b. both producer and consumer surplus would decrease
c. producer surplus would decrease and consumer surplus would increase
d. producer surplus would increase and consumer surplus would decrease
e. producer and consumer surplus would remain unchanged
B
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When the Fed ________ the federal funds rate, other short-term interest rates and the exchange rate also ________. The quantity of money and the supply of loanable funds ________
A) lowers; rise; increase B) lowers; fall; decrease C) lowers; fall; increase D) raises; rise; increase E) raises; fall; increase
Using the data in the above table, if potential GDP for this economy is $25 billion, then at the present moment real GDP is
A) less than potential GDP. B) equal to potential GDP. C) greater than potential GDP. D) at the full-employment level of output. E) not comparable to potential GDP.
In the Keynesian cross diagram, a decrease in investment spending because companies become more pessimistic about investment profitability causes the aggregate demand function to shift ________, the equilibrium level of aggregate output to fall, and
the IS curve to shift to the ________, everything else held constant. A) up; left B) up; right C) down; left D) down; right
A portfolio is a
A) brokerage house specializing in the trading of common stock. B) brokerage house specializing in the trading of corporate bonds. C) measure of the risk involved with a holding a particular asset. D) collection of assets.