Refer to Figure 5-5. If, because of an externality, the economically efficient output is Q2 and not the current equilibrium output of Q1, what does D2 represent?

The reason for calling the current exchange rate system a "managed float" is

a. it is managed by the IMF b. it is basically a misnomer because it is impossible to "manage" exchange rates c. it recognizes that there will be some intervention by central banks d. only the forces of supply and demand determine the exchange rates e. Congress passed a law declaring that the exchange rate system be legally termed "managed float"

Economists calculate GDP two different ways. They add up the total value of all final goods and services produced in the economy in a given year and add up the total value of the resources used in making these goods and services. Identify these two approaches. a. The former calculation is called the circular flow approach to GDP; the latter is called the income approach to GDP

b. The former calculation is called the expenditure approach to GDP; the latter is called the income approach to GDP. c. The former calculation is called the income approach to GDP; the latter is called the expenditure approach to GDP. d. The former calculation is called the real GDP approach; the latter is called the nominal GDP approach. e. The former calculation is called the nominal GDP approach; the latter is called the real GDP approach.