Suppose that Figure 10.5 shows an industry's market demand, its marginal revenue, and the production costs of a representative firm. If the industry was perfectly competitive, the consumer surplus would be:

Planned expenditures ________

A) are directly affected by government purchases B) increase when there is a reduction in taxes C) decrease when disposable income decreases D) all of the above E) none of the above

The expected effects of a tighter monetary policy are

a. lower real interest rates. b. exchange rate depreciation. c. lower inflation. d. All of the above are correct.