Refer to the above figure. Suppose that the economy starts at AD1. If the government reduces taxes, then the economy goes to AD2, but then falls back to AD1. This is an example of

As the Asian financial crisis of 1997 began to spread, it became obvious to investors that Korean investments would provide lower returns than expected. What was the impact of such a realization on the foreign exchange market?

a. The supply of Korean won decreased as people tried to withdraw their Korean investments. b. The price of dollar in terms of Korean currency decreased as people invested more in U.S. assets. c. The demand for dollars decreased as investors realized that there is a worldwide crisis going on. d. The demand for dollars increased as investors put their money in U.S. and other foreign assets. e. The demand for Korean won increased as investors decided to invest in Korean assets.

Total surplus in a market is equal to

a. consumer surplus + producer surplus. b. value to buyers - amount paid by buyers. c. amount received by sellers - costs of sellers. d. producer surplus - consumer surplus.