What are the two tools of fiscal policy that governments can use to affect the level of aggregate demand?
A. government spending and taxation
B. government spending and technology improvements
C. taxation and controlling imports
D. taxation and controlling exports
Answer: A
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All economic transactions involve only buyers and sellers; no third parties are involved
a. True b. False Indicate whether the statement is true or false
If a bank has reserves of $150 million and demand deposits of $1.2 billion, how much are the bank's (a) required reserves and (b) excess reserves?
What will be an ideal response?
All output combinations that lie outside a production possibilities curve are attainable with available resources and technology.
Answer the following statement true (T) or false (F)
Consider a monopolist attempting to engage in limit pricing with total costs C(Q) = 200 + 10Q. The market (inverse) demand for its product is P = 150 ? 2Q. Currently, the monopolist produces 40 units of output. Assuming the potential entrant has the same cost structure as the incumbent monopolist, is it profitable for the entrant to produce 20 units of output?
A. No, since the market price of $70 is less than the average total cost of producing 20 units. B. No, since the market price of $30 is less than the average total cost of producing 20 units. C. Yes, since the market price of $70 is greater than the average total cost of producing 20 units. D. Yes, since the market price of $30 is greater than the average total cost of producing 20 units.