Which set of events would most likely decrease aggregate demand?
A. An increase in personal income tax rates.
B. A reduction in the excess capital of the existing capital stock.
C. A reduction in business and personal tax rates.
D. An increase in investment spending.
Answer: A
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Two identical firms that share a market and produce a homogeneous good will find the Bertrand Oligopoly LEAST attractive because
A) Cartels generate the highest joint profit. B) a Cournot Oligopoly will generate more profit than a Bertrand Oligopoly. C) they want to avoid a price war that leads to profit erosion and P = MC. D) All of the above.
Paul the Pizza Man used a new method to streamline pizza assembly that allowed him to make more pizzas and thus make greater revenue. Paul began to earn positive economic profits. In the long run, Paul will
a. continue to earn economic profits b. earn zero economic profits because other pizza places will begin to use his system c. continue to earn economic profits because Paul will get a patent on his new method d. earn negative economic profits because innovators always loose money e. earn zero economic profits because the government does not allow monopolistically competitive firms to earn economic profits
A U.S. citizen buys bonds issued by an automobile manufacturer in Japan. Her expenditures are U.S
a. foreign direct investment that increase U.S. net capital outflow. b. foreign direct investment that decrease U.S. net capital outflow. c. foreign portfolio investment that increase U.S. net capital outflow. d. foreign portfolio investment that decrease U.S. net capital outflow.
Total revenue decreases if price ________ and demand is ________.
A. rises; inelastic B. rises; unit elastic C. falls; elastic D. falls; inelastic