In the Keynesian analysis of changes from one Real GDP level to another, which of the following plays a critical role?
A) changes in prices
B) the relationship between optimum inventory levels and current inventory levels
C) the long-run aggregate supply (LRAS) curve
D) the relationship between total expenditures (TE) and the aggregate demand (AD) curve
E) none of the above
B
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Which of the following best explains why monopolistically competitive firms face a downward sloping demand curve while perfectly competitive firms do not?
A) Monopolistically competitive firms sell a differentiated good. B) Monopolistically competitive industries have only a few firms. C) Monopolistically competitive firms have barriers to entry. D) Only industries with free entry and exit have firms that face horizontal demand curves.
Which of the following taxes is based on the ability-to-pay principle?
a. tolls on a bridge b. income taxes c. gasoline excise taxes d. property taxes e. user fees that collect the same amount from each person
What is "competitive" about a monopolistically competitive market?
What will be an ideal response?
An effective price ceiling occurs when
A) the government sets a maximum price for a good above the equilibrium price. B) the government sets a minimum price for a good above the equilibrium price. C) the government sets a minimum price for a good below the equilibrium price. D) the government sets a maximum price for a good below the equilibrium price.