If the government increases expenditures on goods and services and increases taxation by the same amount, which of the following will occur?
a) aggregate demand will be unchanged
b) aggregate demand will increase
c) interest rates will decrease
d) the money supply will decrease
e) the money supply will increase
Ans: b) aggregate demand will increase
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A production quota on tobacco lowers the price of tobacco and the marginal cost of producing it
Indicate whether the statement is true or false
An increase in the quantity of money supplied shifts the money supply curve to the ________ and the LM curve to the ________, everything else held constant
A) right; left B) right; right C) left; left D) left; right
Firms 1 and 2 compete in a Cournot duopoly. If firm 2 adopts a strategy that raises firm 1's marginal cost:
A. firm 2 will lose market share. B. firm 1 will enjoy higher profits. C. firm 1 will increase its output. D. None of the statements is correct.
Refer to the information provided in Table 14.2 below to answer the question that follows. Table 14.2B's Strategy ?AdvertiseDon't Advertise??A's profit $100 millionA's profit $200 million?AdvertiseB's profit $100 millionB's profit $50 millionA's Strategy????Don'tA's profit $50 millionA's profit $75 million?AdvertiseB's profit $200 millionB's profit $75 millionRefer to Table 14.2. Firm A?s dominant strategy is
A. dependent on what Firm B does. B. to not advertise. C. to advertise. D. indeterminate from this information, as no information is provided on Firm A?s risk preference.