A support price set above the equilibrium price ______
A. creates a shortage, increases farmers' total revenue, and is efficient
B. creates a surplus, which the government buys and dumps on the rest of the world to keep the U.S. market price equal to the price support
C. is inefficient because farmers' marginal cost exceeds U.S consumers' marginal benefit
D. is efficient because farmers' marginal cost equals U.S. consumers' marginal benefit
B Price supports set above the equilibrium price require the government to purchase the surplus to maintain the price.
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In any year, nominal GDP divided by the GDP chain price index equals real GDP
a. True b. False Indicate whether the statement is true or false
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the quantity of real loanable funds per time period and the nominal value of the domestic currency in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns
to complete equilibrium. a. Real GDP rises and nominal value of the domestic currency remains the same. b. Real GDP falls and nominal value of the domestic currency remains the same. c. Real GDP and nominal value of the domestic currency remain the same. d. Real GDP rises and nominal value of the domestic currency rises. e. There is not enough information to determine what happens to these two macroeconomic variables.