A rise in net exports shifts the aggregate
A. demand curve inward.
B. demand curve outward.
C. supply curve outward.
D. supply curve inward.
Answer: B
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For the monopolistic competitor, which of the following is INCORRECT?
A) Because the firm is not a perfect competitor, its demand curve slopes downward. B) The marginal revenue curve is downward sloping and lies below the demand curve. C) The profit-maximizing rate of output arises at the point at which the marginal cost curve intersects the marginal revenue curve. D) If the firm in a monopolistically competitive industry were making economic losses, new firms will enter the industry.
If a regulator sets the price equal to the natural monopolist's marginal cost,
a. the monopoly will experience a loss b. the monopoly will earn a profit c. the monopoly will earn zero profit d. consumers will be worse off than they would be if the firm's profit maximization activities were unregulated e. the monopoly will be better off than it would be if its profit maximization activities were unregulated
The theoretical model of the intertemporal budget constraint suggests that the most important factor in support of individual savings is:
a. the preference of the individual. b. a higher rate of return on savings. c. an increase in income. d. a decrease in the cost of living.
Explain the effect of a discretionary cut in taxes of $40 billion on the economy when the economy’s marginal propensity to consume is .75. How does this discretionary fiscal policy differ from a discretionary increase in government spending of $40 billion?
What will be an ideal response?