If all fixed taxes in the United States were removed and only variable taxes remained, what would be the effect on the expenditures schedule?
A. The expenditure schedule will shift upward.
B. The expenditure schedule will shift downward.
C. The expenditure schedule will become flatter.
D. The expenditure schedule will become steeper.
Answer: A
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Use the following graph to answer the next question.
If aggregate supply shifts from AS1 to AS2, then the price level will ________.
A. decrease and real domestic output will increase B. decrease and real domestic output will decrease C. increase and real domestic output will increase D. increase and real domestic output will decrease
Regarding IBFs, which of the following is correct?
A) not subject to reserve requirements B) not subject to interest rate regulations C) were created to permit U.S. banking offices to compete with offshore banks without having to use an offshore banking office D) All of the above.
Consider the following payoff matrix for a game in which two firms attempt to collude under the Bertrand model:
Firm B cuts Firm B colludes Firm A cuts 6,6 24,8 Firm A colludes 8,24 12,12 Here, the possible options are to retain the collusive price (collude) or to lower the price in attempt to increase the firm's market share (cut). The payoffs are stated in terms of millions of dollars of profits earned per year. What is the Nash equilibrium for this game? A) Both firms cut prices. B) Both firms collude. C) There are two Nash equilibria: A cuts and B colludes, and A colludes and B cuts. D) There are no Nash equilibria in this game.
The incentives for oligopolists to cheat on collusive agreements are strongest during periods of increasing industry sales
a. True b. False