In Macroland, potential output equals $100 trillion and the natural rate of unemployment is 4 percent. If the actual unemployment rate is 5 percent, then the output gap equals:

When a tax is imposed on sellers, consumer surplus and producer surplus both decrease

a. True b. False Indicate whether the statement is true or false

Answer the following statement true (T) or false (F)

1) The smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it. 2) The smaller the number of good substitutes for a product, the greater will be the price elasticity of demand for it. 3) Generally speaking, the demand for luxury goods is more price elastic than is the demand for necessities. 4) Generally speaking, the smaller the percentage of one's total budget devoted to a particular product, the more price elastic will be the demand for that product.