An increase in nominal GDP implies that the country is producing a greater quantity of goods and services
Indicate whether the statement is true or false
FALSE
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The Ricardian equivalence theorem suggests that an increase in the government budget deficit created by a tax cut will
A) decrease real Gross Domestic Product (GDP) in the short run, but increase it in the long run. B) decrease real Gross Domestic Product (GDP) in both the short and long run. C) increase real Gross Domestic Product (GDP) in both the short and long run. D) have no effect on aggregate demand.
Suppose a country increases trade restrictions. This country would be pursing an
a. inward policy, which most economists believe has beneficial effects on the economy. b. inward policy, which most economists believe has adverse effects on the economy. c. outward policy, which most economists believe has beneficial effects on the economy. d. outward policy, which most economists believe has adverse effects on the economy.
Competitive markets result in allocative efficiency because they
A. exhaust all possible benefits for the consumer. B. exhaust all possibilities for mutually beneficial trade. C. distribute resources in the most equitable way. D. generate all possible benefits for the consumers.
consumer surplus
What will be an ideal response?