Table 13-3 All Figures in Billions of Base-Year Dollars

question 45

Multiple Choice

Table 13-3
All figures in billions of base-year dollars

-Refer to Table 13-3. Holding everything else constant, if government purchases increase by $100 billion, equilibrium real GDP will increase by

• A) $100 billion.
• B) $200 billion.
• C) $250 billion.
• D) $300 billion.

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Definitions:

Equilibrium Quantity

The quantity of goods or services that is supplied and demanded at the market equilibrium price.

Producer Surplus

The difference between the amount a producer is willing to accept for a good or service and the actual amount received by them when the good or service is sold.

Total Surplus

A combination of consumer and producer surplus that signifies the overall net advantage to society from the consumption and production of a good or service.

International Trade

involves the exchange of goods and services across international borders or territories.