Market consumer surplus at any price
a. is the area above the market supply curve and below the market demand curve
b. is the area below the market supply curve and above the market demand curve
c. is the area under the demand curve and above the market price
d. is that price multiplied by the number of units demanded
e. is the number of units demanded multiplied by the cost of producing them.
C
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Which of the following can help to explain why higher inflation may lead to currency appreciations?
A) The interest rate is not the prime target of monetary policy. B) Most central banks adjust their policy interest rates expressly so as to keep inflation in check. C) Central banks increase the money supply leading to overshooting of the exchange rate. D) Inflation will increase the purchasing power of a currency. E) The world market does not adjust their currency trade to reflect inflation.
The conclusion arrived at from a kinked-demand oligopoly model is that:
a. oligopoly firms cannot maximize their profits. b. oligopoly firms should keep prices at their current level. c. all oligopoly firms should raise prices. d. all oligopoly firms should lower prices. e. oligopoly market structure will lead to lower prices than more competitive industries.
An appropriate Keynesian response to an inflationary gap is to: a. decrease net taxes
b. decrease government spending. c. decrease interest rates. d. decrease the cash reserve ratio.
According to the long-run Phillips curve, if the Fed increases the growth rate of the money supply, what happens to the inflation rate and the unemployment rate in the long run?