Refer to the figure above. What is the producer surplus after Lithasia opens up to free trade?
A) $2
B) $3
C) $6
D) $9
B
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Which of the following statements accurately describes the two measures of the money supply?
A) The two measures do not move together, so they cannot be used interchangeably by policymakers. B) The two measures' movements closely parallel each other, even on a month-to-month basis. C) Short-run movements in the money supply are extremely reliable. D) M2 is the narrowest measure the Fed reports.
The flexible accelerator theory
A) recognizes that the desired capital-output ratio is not a constant. B) assumes that firms can make this period's actual capital stock equal to the desired capital stock. C) sets this period's expected output equal to last period's actual output. D) recognizes that a constant fraction of the capital stock is replaced each period.