If the equilibrium quantity of a good is also the socially optimal quantity, then:
A. total economic surplus has been maximized.
B. the marginal cost to producers of another unit of the good is zero.
C. it's possible to make at least one person better off without hurting anyone else.
D. the marginal benefit to consumers of another unit of the good is zero.
Answer: A
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A) involve increasing government spending. B) reduce the price level. C) involve cutting taxes. D) raise real GDP.
The exchange rate is volatile because
A) the demand curve and the supply curve are horizontal. B) when a relevant factor changes, demand and supply tend to change in opposite directions. C) the demand curve is vertical. D) the supply curve is vertical. E) when a relevant factor changes, demand and supply tend to change in the same direction.