Consider an unregulated monopoly in Figure 13.2. If a second firm enters the market, the demand curve facing the first firm will:
A. shift to the right.
B. shift to the left.
C. remain the same.
D. There is insufficient information.
Answer: B
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If the Fed wants to lower the nominal interest rate in the short run, the Fed ________ the growth rate of the quantity of money
A) raises B) lowers C) first lowers and then raises D) does not change E) None of the above answers is correct because the premise of the question is wrong since the Fed cannot affect the nominal interest rate, only the real interest rate.
What is a depreciation to one country must be an appreciation to the other.
Answer the following statement true (T) or false (F)
Assume that an economy's income multiplier is 4 . If this economy is in equilibrium at $2,000 billion, then which one of the following actions will bring it to a full employment equilibrium without inflation of $1,500 billion?
a. $500 billion spending cut b. $500 billion spending increase c. $125 billion spending cut d. $125 billion spending increase e. $2,000 billion spending cut
When the tax structure of a nation is progressive, as real incomes increase, the tax revenues of the government will
a. decline. b. increase by the same proportion as the increase in real income. c. increase by a larger proportion than the increase in real income. d. remain unchanged unless legislative action is undertaken.