An increase in the interest rate should ________ the demand for dollars and the value of the dollar, and net exports should ________
A) decrease; decrease
B) decrease; increase
C) increase; decrease
D) increase; increase
E) increase; not change
Answer: C
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Use the following graph for a monopolistically competitive firm to answer the next question.
A firm with which demand curve has more control over prices?
A. B, because its more elastic B. A, because it's more inelastic C. B, because it's more inelastic D. A, because it's more elastic
With rent seeking by a monopoly
A) the monopolist's average total costs will increase so that its average total cost curve is tangent to the demand curve at the profit-maximizing price. B) a monopoly uses all of what would be its economic profit to prevent other firms from taking its economic rent. C) the full deadweight loss of monopoly is larger than in the absence of rent seeking. D) All of the above answers are correct.
Refer to Table 13-1. What portion of the marginal revenue of the 5th unit is due to the output effect and what portion is due to the price effect?
A) output effect = $1.50; price effect = $2.00 B) output effect = $5.50; price effect = -$2.00 C) output effect = $3.00; price effect = $0.50 D) output effect = $4.00; price effect = -$0.50
Real business cycle theory argues that the primary cause of business cycles is fluctuations in
A) preferences. B) government spending. C) the importance of externalities. D) total factor productivity.