If a given fiscal policy is fully accommodated by monetary policy, then
A) GDP will remain constant.
B) the interest rate will remain constant.
C) GDP and the interest rate will move in the same direction.
D) GDP and the interest rate will move in the opposite direction.
B
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In a Bertrand model, graphically, the intersection of all firms' best-response curves determines
A) the Nash equilibrium prices. B) the dominant strategy for each firm. C) the degree of product differentiation. D) the price of the market leader.
Tele-Com, Inc, the nation's largest cable TV company, tested the effect of a price reduction for the Disney Channel. It lowered prices from $10.75 to $7.95 and found that the number of customers more than doubled. This means the
a. demand curve for the Disney Channel shifted to the right. b. supply curve of the Disney Channel shifted to the left. c. demand for the Disney Channel is elastic in this price range. d. demand for the Disney Channel is inelastic in this price range.
When quantity demanded increases at every possible price, the demand curve has
a. shifted to the left. b. shifted to the right. c. not shifted; rather, we have moved along the demand curve to a new point on the same curve. d. not shifted; rather, the demand curve has become steeper.
In order to maximize profits, firms organize their production using
A) only a command system. B) only an incentive system. C) a combination of command and incentive systems. D) neither a command nor an incentive system.