A fiscal policy action to close an expansionary gap is to:
A. decrease taxes.
B. increase the marginal propensity to consume.
C. increase transfer payments.
D. decrease government purchases.
Answer: D
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Price discrimination
a. is illegal in the United States and Europe. b. can occur in both perfectly competitive and monopoly markets. c. is illogical because it does not maximize profits. d. can maximize profits if the seller can prevent the resale of goods between customers.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States, it would likely cause a:
A. short-run supply shock. B. long-run supply shock. C. long-run demand shock. D. short-run demand shock.
Dumping is defined as
A. selling a good abroad at prices below its cost of production or below the price charged in the home market. B. exporting goods that are sources of pollution. C. exporting goods that are of inferior quality. D. selling a good abroad at prices above the costs of the firms in the foreign countries.
The Cournot Model of Oligopoly assumes that
A) firms decide what quantity to produce. B) firms make their decisions simultaneously. C) firms do not cooperate. D) All of the above.