SOPHIA ECON102 Unit 2 Challenge 2 Latest 2022 May

ECON102 Macroeconomics

Unit 2 Challenge 2

In order to be effective, a price ceiling must be set __________.

a.)below the current equilibrium price

b.)at the market clearing price

c.)above the current equilibrium price

d.)at the highest possible price for the market

When are consumer and producer surplus maximized?

a.)When a price floor is imposed

b.)When a price ceiling is imposed

c.)When deadweight loss is highest

d.)At equilibrium

The goal of a subsidy is to __________.

a.)encourage production of a good

b.)avoid deadweight loss

c.)raise revenue for the government

d.)discourage consumption of a good

Which of the statements about aggregate demand is true?

a.)As the price level falls, consumers purchase more.

b.)The price level falls, so RGDP does as well.

c.)There is a direct relationship between price level and RGDP that consumers purchase.

d.)The price level increases, so firms produce more goods.

The economy will be producing along the Long Run Aggregate Supply when ________.

a.)all resources are being used to their optimal level

b.)there is an underutilization of resources

c.)there is zero unemployment

d.)prices will affect output by producers

When an economy is producing to the left of the LRAS, __________.

a.)contractionary monetary policies should be put in place

b.)expansionary fiscal policies should be put in place

c.)the LRAS curve will shift to the left to meet the current price level and GDP

d.)resources are over-utilized