Assume the market is in equilibrium in the graph shown at demand D and supply S1. If the supply curve shifts to S2, and a new equilibrium is reached, which of the following is true?
A. Consumer surplus increases, and total surplus increases.
B. Consumer surplus decreases, and total surplus increases.
C. Consumer surplus increases, and total surplus decreases.
D. Consumer surplus decreases, and total surplus decreases.
A. Consumer surplus increases, and total surplus increases.
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Refer to Figure 18-1. The depreciation of the dollar is represented as a movement from
A) B to A. B) B to C. C) A to C. D) A to B. E) D to C.
If the public is not sure about the central bank's motives, then
A) initial releases of data may be less accurate than later data releases. B) the predominant source of shocks to the economy must be shocks to the LM curve. C) central bankers should try to stabilize the inflation rate. D) modern macroeconomic modeling techniques will fail.