One fundamental difference between New Classical and the New Keynesian macroeconomics is that the New Keynesians model firms as ________ competitive price ________
A) perfectly, setters
B) perfectly, takers
C) imperfectly, setters
D) imperfectly, takers
C
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Suppose two duopolists operate at zero marginal cost. The market demand is p = a - bQ. If firm 1 is the Stackelberg leader, what level of output will it choose?
A) q1 = (a - bq2 )/2b B) q1 = (a - 2bq2 )/2b C) q1 = a/b D) q1 = a/2b
The Federal Reserve ___
a. oversees the US banking system b. determines the size of M1 and M2 and sets US interest rates c. is the central bank of the US d. all
Give an example of income elasticity of demand for a normal good and an inferior good. Calculate a sample income elasticity of demand for each.
What will be an ideal response?
If two firms behave as Cournot duopolists, the level of social welfare is lower than if the same firms act as a cartel
Indicate whether the statement is true or false