An increase in the federal budget deficit _____
Fill in the blank(s) with the appropriate word(s).
increases aggregate demand.
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________ believed that wages would resist falling during economic downturns.
A. Keynes B. Both Keynes and classical macroeconomic theorists C. Neither Keynes nor classical macroeconomic theorists D. Classical macroeconomic theorists
In contrast to both perfect competition and monopolistic competition, an oligopoly market structure is characterized by:
a. price discrimination. b. a perfectly inelastic demand curve. c. the presence of infinite number of firms. d. the production of only differentiated products. e. difficulty in the entry of new firms.
If a firm is able to charge each customer the maximum amount that he or she is willing to pay for its good,
a. the firm is engaging in rent-seeking behavior b. profits for the firm will be lower than for a single-price monopolist c. the firm will be violating federal law d. this is perfect price discrimination e. barriers to entry into the market will fall
Within the aggregate demand-aggregate supply framework, a strict interpretation of rational expectations theory suggests that a change in aggregate:
A. Demand will have a large effect on the price level, but a small effect on output B. Demand will have a small effect on the price level, but a large effect on output C. Demand will have a large effect on the price level, but no effect on output D. Supply will have a large effect on the price level, but no effect on output