In a certain economy, the components of aggregate spending are given by: C = 60 + 0.6(Y - T) - 1,000rI = 200 - 1,000rG = 200NX = 50T = 100Given the information about the economy above, which expression below gives autonomous expenditures?
A. [510 - 2,000r] + 0.6Y
B. [570 - 2,000r] + 0.6Y
C. [450 - 2,000r] + 0.6Y
D. [510 - 1,000r]
Answer: C
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An economy produces only two goods: paper and scissors. Dyes from paper production pollute a nearby river. Use a production possibilities curve (PPC) to illustrate your explanation of how the unfettered market would fail to provide the efficient mix of paper and scissors.
What will be an ideal response?
The large number of banks in the United States is an indication of
A) vigorous competition within the banking industry. B) lack of competition within the banking industry. C) only efficient banks operating within the United States. D) consumer preference for local banks.
Answer the following statements true (T) or false (F)
1. As more firms enter a monopolistic competitive industry, average revenue will fall for existing firms. 2. In an oligopoly, the pricing policy of each firm is independent of that of other firms. 3. A kinked demand curve results when one firm’s price changes are followed downward but not upward by competing firms. 4. In the long run, economic profits tend to be eliminated under conditions of monopolistic competition. 5. Predatory pricing involves charging different customers different prices for the same good.
Cartel members have a collective interest in ____ industry price and a private interest in ____ their own prices
a. increasing; increasing b. increasing; decreasing c. decreasing; increasing d. decreasing; decreasing