Regulation might NOT increase total surplus because
A) the costs of the regulation might outweigh the benefits.
B) it may not be possible to gather the information necessary to set prices correctly.
C) regulators might get captured by the industry.
D) All of the above.
D
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If MPC = 0.8 and the economy is in equilibrium $500 below full-employment equilibrium, how much should government spending change to achieve full employment?
a. ?100. b. +80. c. ?80. d. +500. e. +100.
In the aggregate expenditures model, a decrease in government spending causes a(n):
a. upward shift in the aggregate expenditures curve. b. downward shift in the aggregate expenditures curve. c. shift in the 45-degree line. d. rightward movement along the aggregate expenditures curve. e. leftward movement along the aggregate expenditures curve.