The inauguration of a new President often increases the degree of optimism in foreign business firms and foreign households, causing net exports to

In the income-expenditure model, equilibrium output is the level of output at which the 45-degree line intersects the planned expenditures line. Explain why this output level is an equilibrium level

Illustrate your answer with a diagram of the income-expenditure model.

Which of the following statements correctly differentiates between consumer surplus and net benefits?

A) Consumer surplus at different levels of consumption can be calculated arithmetically, whereas net benefits at different levels of consumption cannot be estimated. B) Consumer surplus at different levels of consumption cannot be estimated, whereas net benefits at different levels of consumption can be calculated arithmetically. C) Consumer surplus measures difference between willingness to pay for a good and its price, whereas net benefits measure the overall satisfaction gained from consumption of a good. D) Consumer surplus equals the overall satisfaction gained from consumption of a good, whereas net benefits measure the difference between willingness to pay for a good and its price.