Resources employed to persuade government to redistribute income and wealth to special interests are unproductive

If the quantity of real GDP demanded is greater than the quantity of real GDP supplied, then

A) the economy must be producing at potential GDP. B) aggregate demand changes to restore equilibrium. C) the price level falls to restore the macroeconomic equilibrium. D) the price level rises and firms increase production. E) the price level falls and firms decrease production.

Suppose a tax of $0.50 per unit on a good creates a deadweight loss of $100 . If the tax is increased to $2.50 per unit, the deadweight loss from the new tax would be

a. $200. b. $250. c. $500. d. $2,500.