The new classical view of budget deficits assumes that
a. people view government bonds as an addition to their wealth.
b. individuals do not anticipate the tax liability implied by deficit spending.
c. increased government borrowing will raise the interest rate and retard private borrowing and capital formation.
d. if future taxes (debt) are substituted for current taxes, people will save the reduction in current taxes in order to pay the higher future taxes.
D
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Refer to the figure above. If the supply curve for flash drives shifts from S1 to S2, with no change in the demand curve, the new competitive equilibrium price is:
A) $3. B) $4. C) $5. D) $7.
Listed in the above table are the market shares for the firms in two different industries. Each industry has only eleven firms. Find the four-firm concentration ratio and the Herfindahl-Hirschman Index for each industry
What will be an ideal response?
Figure 8-1
Which graph in Figure 8-1 shows a typical firm’s total revenue and total cost curves?
A. (a) B. (b) C. (c) D. (d)
Which of the following pricing strategies does NOT usually enhance the profits of firms with market power?
A. Commodity bundling B. Price discrimination C. Marginal cost pricing D. Block pricing