The expenditure multiplier is greatest when the
A) LM curve is positively sloped.
B) LM curve is horizontal.
C) IS curve is vertical.
D) LM curve is vertical.
B
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Answer the following statement(s) true (T) or false (F)
1. Marginal Revenue measures the slope of the Demand curve. 2. Marginal Cost measures the slope of the total cost and total variable cost curves. 3. The Marginal Benefit of consuming an additional unit of a good tends to increase as the number of units consumed increases. 4. If a firm increases production from 120 units to 130 units, then its Marginal Revenue is 10.
If the demand curve for a firm's output is P=100-5Q, the marginal revenue curve will be
A. MR=20-5Q. B. MR=100-5Q. C. MR=100-10Q. D. MR=20-Q.
Suppose an industry has a four-firm concentration ratio of 20 percent and a Herfindahl index of 600. According to the cartel model, the industry would be more likely to have:
A. a price war. B. a monopolistic price. C. either a monopolistic or a competitive price, depending on barriers to entry and exit. D. a competitive price.
An open market purchase of government securities by the Fed will cause which of the following?
A) an excess quantity of reserves supplied and a reduction in the federal funds rate B) an excess quantity of reserves demanded and an increase in the federal funds rate C) an excess quantity of reserves demanded and a reduction in the federal funds rate D) an excess quantity of reserves supplied and an increase in the federal funds rate