Governments can eliminate market surpluses through the imposition of price floors.

Refer to Figure 23-4. Potential GDP equals $100 billion. The economy is currently producing GDP1 which is equal to $90 billion. If the MPC is 0.8, then how much must autonomous spending change for the economy to move to potential GDP?

A) -$18 billion B) -$2 billion C) $2 billion D) $18 billion

The slope of an indifference curve at all points reflects

a. the terms by which the consumer can trade off goods in the market. b. the relative prices of the two goods. c. the willingness of the consumer to trade one good for another. d. consumer income relative to the price of a good. e. the relative price ratio of the two goods.