If equilibrium is achieved in a competitive market
A) there is no deadweight loss.
B) the deadweight loss will equal the sum of consumer surplus and producer surplus.
C) the deadweight loss will be the same as the opportunity cost of the last unit of output sold.
D) the deadweight loss will be maximized.
A
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If the value of the government multiplier is 1.5, which of the following is likely to be true if all other variables remain unchanged?
A) A $1 increase in government expenditure reduces gross domestic product by $1.50. B) A $1.50 increase in government expenditure increases gross domestic product by $1.50. C) A $1.50 increase in government expenditure reduces gross domestic product by $1.50. D) A $1 increase in government expenditure increases gross domestic product by $1.50.
Picture an economy that is in general equilibrium. What would happen if the natural rate of unemployment were to experience an increase?
A) according to the Phillips curve, the ensuing negative unemployment gap would exert inflationary pressures B) according to Okun's Law, the ensuing negative unemployment gap would be consistent with a positive output gap C) according to the AD-AS framework, the LRAS curve would shift to the left and the ensuing positive output gap would be closed by subsequent leftward shifts in the AS curve to higher equilibrium levels of inflation D) all of the above E) none of the above