If C = 2000 + .9YD, what increase in government spending must occur for equilibrium output to increase by 1000?
A) 100
B) 200
C) 250
D) 500
E) 1000
A
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Demand in a perfectly competitive market is Q = 100 - P. Supply in that market is Q = P - 10. What is the market equilibrium price and quantity? Given that price and quantity, how much consumer surplus, producer surplus, and deadweight loss is there? If the government imposes a $40 price ceiling, what quantity will be produced and sold? Assuming that those who value the good the most actually get after the ceiling is imposed, how much consumer surplus, producer surplus, and dead-weight loss is there?
What will be an ideal response?
Which of the following best describes the policy ineffectiveness proposition?
A) Monetary policy cannot change real GDP in a regular or predictable way. B) Policymakers can be effective in changing real GDP only if people's expectations are correct. C) Monetary policy can change real GDP only if the Fed pursues a consistent, stable growth rate of the real money supply. D) Fiscal policy is totally ineffective in changing real GDP in both the short run and the long run.
If a tariff is used to protect U.S. jobs,
a. income is transferred from consumers to protected producers. b. national production and income increase. c. national production rises but income decreases. d. the effect is neutral since imports are replaced by domestic goods.
When the price elasticity of demand is large in magnitude, a _____ increase in the price leads to a _____ reduction in the amount purchased and the demand curve is relatively ____.
A. slight; substantial; steep B. slight; slight; flat C. large; slight; steep D. slight; substantial; flat