A model in which individual producers act as price setters, because there are only a few sellers and the product they sell is not standardized, is called
A. perfect competition.
B. monopoly.
C. imperfect competition.
D. monopsony.
Answer: C
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"The law of diminishing returns is the same as the decreasing returns to scale." Do you agree? Explain
What will be an ideal response?
A decrease in the rate of inflation will increase the rate of unemployment.
Answer the following statement true (T) or false (F)
In the traditional Keynesian model, an increase in government spending
A. causes no change in the C + I + G + X line. B. causes the C + I + G + X line to shift upward by the full amount of the increase in government spending. C. causes the C + I + G + X line to shift upward by more than the increase in government spending. D. causes the C + I + G + X line to shift upward by an amount less than the increase in government spending.
A change in tax rates
A) has a less complicated effect on GDP than does a tax cut of a fixed amount. B) has a larger multiplier effect the smaller the tax rate. C) will not affect disposable income. D) will not affect the size of the multiplier.