When a second firm enters a monopolist's market, the initial demand curve facing the monopolist will:
A. shift to the left.
B. shift to the right.
C. remain the same.
D. None of these
Answer: A
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Assume an economy that is producing only one product. Output and price data for a three-year period are as follows. Answer the question on the basis of these data. year units of output price per unit 1 20 4 2 25 4 3 30 6 Refer to the above data. If year 2 is chosen as the base year, in years 1 and 3 the price index values, respectively, are:
a) 4 and 6. b) 6 and 4. c) 120 and 100. d) 100 and 150.
During World War II the United States' economy grew by about ________ percent a year.
A. 5 B. 10 C. 15 D. 20
The Permanent Income and Life-Cycle Hypothesis imply that
A. the primary determinant of current consumption is permanent income. B. the primary determinant of permanent income is current consumption. C. consumers generally favor current consumption over future consumption. D. consumers are more likely to save if they are uncertain about the future.
The Ricardian equivalence theorem states that
A. increases in government spending have a larger impact on real Gross Domestic Product (GDP) than decreases in taxes. B. an increase in the government budget deficit has no effect on real Gross Domestic Product (GDP) because it only affects the price index. C. an increase in government spending has no effect on aggregate supply. D. an increase in the government budget deficit created by a current tax cut has no effect on aggregate demand.