How does an increase in government spending affect the aggregate expenditure line?
A) It shifts the aggregate expenditure line upward.
B) It increases the slope of the aggregate expenditure line.
C) It shifts the aggregate expenditure line downward.
D) It decreases the slope of the aggregate expenditure line.
A
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Monopolistic competitors advertise because
A) they have downward sloping demand curves. B) the demand curves they face are very elastic. C) they produce goods that can be differentiated from the goods of other firms in the industry. D) they can earn long-run profits if they advertise.
Which one of the following is the best description of a monopolist?
a. a firm that produces a single product b. a firm that is the sole producer of a narrowly defined product class, such as yellow, grade-A butter produced in Wisconsin c. a firm that is the sole producer of a product for which there are no good substitutes in a market with high barriers to entry d. a firm that is large relative to its competitors
A demand curve shows the relationship
a. between income and quantity demanded. b. between price and income. c. between price and quantity demanded. d. among income, price, and quantity demanded.
Kim is paid $50,000 per year, and pays an annual income tax of 10 percent. Due to an inflation rate of 10 percent, her pay increases to $55,000, which puts her in a higher tax bracket where she must pay 20 percent. Kim has experienced:
A. the inflationary cost of tax distortion. B. an increase in her purchasing power. C. bracket costs. D. the deflationary cost of tax distortion.