Why does a monopoly cause a deadweight loss?
A) because it does not produce some output for which demand exceeds supply
B) because it increases producer surplus at the expense of consumer surplus
C) because it appropriates a portion of consumer surplus for itself
D) because it does not produce some output for which marginal benefit exceeds marginal cost
D
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A fall in the long-run real interest rates leads to a ________
A) leftward shift of the labor supply curve B) leftward shift of the labor demand curve C) rightward shift of the labor supply curve D) rightward shift of the labor demand curve
Suppose the Fed had tried to keep the exchange rate at its 2001 level. In that case the Fed would have ________ dollars and its foreign reserves would have ________
A) bought; decreased B) sold; increased C) sold; decreased D) bought; increased E) None of the above is correct because the Fed cannot affect the exchange rate.