Answer the following statement true (T) or false (F)
1) Fiscal policy is more susceptible to politicization than monetary policy.
2) Changes in tax rates are a form of monetary policy.
3) Monetary policy attempts to change the level of spending by altering interest rates.
4) The problem of limited and bundled choices explains why many voters cannot fully express
their political preferences.
5) Regulatory capture occurs when government exerts excessive control over an industry.
1) T
2) F
3) T
4) T
5) F
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Suppose a market is currently served by an incumbent firm. If a potential entrant can enter prior to the incumbent firm announcing its output (or price), the incumbent cannot deter entry through its actions.
Answer the following statement true (T) or false (F)
Since revenue increases with increases in price when demand is relatively inelastic, monopolists produce on the inelastic part of demand.
Answer the following statement true (T) or false (F)
Should the level of pollution be reduced to zero and if not, then to what level?
What will be an ideal response?
Consider the game tree in Figure 12.8. The duopolists' dilemma in the game is that:
A. both firms choose to advertise even if it leads to lower profits. B. both firms choose not to advertise even if it leads to higher profits. C. only Store A has an incentive to advertise. D. only Store B has an incentive to advertise.