Because of product differentiation, firms
A) do not have to compete because their products are unique.
B) cannot compete on price.
C) can compete on the basis of quality.
D) are unable to compete by using advertising.
E) must compete on only price.
C
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The balanced-budget multiplier is calculated as the government spending multiplier minus the tax multiplier
Indicate whether the statement is true or false
Suppose Fiona's base consumption equals $1,000 per month when her income is zero. Fiona earns $5,000 per month, and her marginal propensity to consume is 0.8 . If her monthly income increases by $1,500, her total consumption will be _____
a. $8,400 b. $10,000 c. $6,200 d. $4,800
In the principal-agent model, at the employee's optimal effort choice:
A. the incentive coefficient of effort is very high. B. the net benefits of effort are maximized. C. the marginal benefit of effort is negative. D. the marginal costs of efforts exceed the marginal revenue.
Which of the following would cause stagflation?
a. rising government expenditures b. rising oil prices c. a falling money supply d. technical progress