According to the graph shown, if this economy were to open to trade, surplus would do all of the following except:
This graph demonstrates the domestic demand and supply for a good, as well as the world price for that good.
A. increase overall.
B. decrease for the producer.
C. transfer from producer to consumer.
D. create deadweight loss of CEFG.
D. create deadweight loss of CEFG.
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The real interest rate is:
A. adjusted for inflation. B. the actual average interest rate in the economy. C. the amount of interest the bank pays you for saving or charges you for borrowing. D. the everyday notion of the interest rate.
Mauritius, an island off the coast of Africa, competes with other countries producing goods with low-skilled labor. In 2006, it was reported that its "...factories have been exposed to ... competition from China, India, and other Asian mass producers." As a result, "the main export industry has seen a 30% reduction in volume..." Suppose real GDP is $14 billion, exports total $2 billion and the multiplier is 4. If exports decline by $600,000,000, real GDP in Mauritius will:
a) increase by $2.4 billion b) decrease by $2.4 billion c) decrease by $8 billion d) increase by $4 billion