An expansionary fiscal policy can be illustrated by a(n):
A. increase in aggregate demand.
B. increase in aggregate supply.
C. decrease in aggregate demand.
D. change in the price level.
Answer: A
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If a monopoly can perfectly price discriminate, then its marginal revenue curve will be
A) the same as its demand curve. B) the same as its supply curve. C) the same as its marginal cost curve. D) a vertical line at the profit-maximizing quantity of output. E) undefined because it does not exist.
An important reason why Ricardian equivalence may fail is if
A) borrowing and lending are done through intermediaries. B) government debt incurred today may not be paid off until after some current consumers are deceased. C) state and local governments also engage in debt finance. D) some consumers are borrowers, while other consumers are lenders.
If two or more markets are closely related,
A) a partial equilibrium analysis will tend to overstate the price impact of a supply shock. B) a partial equilibrium analysis will tend to accurately predict the price impact of a supply shock. C) a partial equilibrium analysis will tend to understate the price impact of a supply shock. D) they should be analyzed concurrently but using partial equilibrium analysis alone.
General equilibrium analysis
A. concerns competitive equilibrium only in the factor markets. B. concerns competitive equilibrium only in the product markets. C. concerns competitive equilibrium in a single market, considered in isolation. D. is the study of competitive equilibrium in many markets at the same time.