The entry of new firms into a monopolistically competitive market is accompanied by
a. both positive and negative externalities.
b. only positive externalities.
c. only negative externalities.
d. only private profit opportunities (no externalities).
a
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Which of the following fiscal policy changes would be the most expansionary?
A. A $20 billion tax cut and $20 billion increase in government purchases B. A $40 billion tax cut C. A $10 billion tax cut and $30 billion increase in government purchases D. A $40 billion increase in government purchases
Capital deepening will occur as long as total saving is greater than depreciation
Indicate whether the statement is true or false
You are an economic advisor to the president. You are asked to recommend a policy to promote long-term economic growth in the economy. Which of the following policies would you choose?
A) a reduction in taxes on luxury yachts B) an investment tax credit C) a reduction in sales taxes D) all of the above
Government spending and taxation determine the position of the ________ curve and, where that curve intersects the vertical line at YN, the ________ target of monetary policy
A) IS, inflation rate B) IS, real interest rate C) LM, inflation rate D) LM, real interest rate