When constructing a basic macroeconomic model, several assumptions (not realistic, but necessary to simplify the analysis) are made. Which of the following are assumed to be constant?
a. the price level
b. the rate of interest
c. the foreign exchange rate
d. the level of government spending
e. All of the above are held constant.
e
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If a government's income tax receipts exceed its expenditures, the government is running a
A) surplus and is a net borrower of funds. B) surplus and is a net saver of funds. C) deficit and is a net borrower of funds. D) deficit and is a net saver of funds.
The results of human action but not of human design
a. have traditionally led to anarchy b. can easily be converted into collective decision-making c. have frequently evolved over time into self-enforcing social institutions d. is in actually the result of planned education funding
A tit-for-tat strategy is one in which oligopolies
A) cooperate as long as other members cooperate, but if anyone cheats, they cut the price until the cheater reverts to cooperation. B) cooperate almost all of the time, but occasionally do not cooperate in order to fool the antitrust authorities. C) keep cutting prices to punish rivals until the competitive price is reached. D) try to avoid the problems of the prisoners' dilemma, but actually make themselves worse off.
If a firm's marginal revenue is greater than its marginal cost, then:
a. each added unit of output will reduce profits. b. the firm is maximizing profit. c. an increase in output will add more to revenue than to cost. d. an increase in output will add more to cost than to revenue. e. a fall in output will add more to revenue than to cost.