Why do firms engage in price discrimination?
A) to decrease cost
B) to increase profits
C) to increase consumer surplus
D) to prohibit the resale of their products
B
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The central bank in the New Keynesian model pursues a policy of
A) fixed money supply. B) inflation between 2 and 3%. C) zero inflation. D) targeting the market interest rate.
Graphically show how transfer payments affect labor supply and production possibilities.
What will be an ideal response?
Automatic stablizers
A. are not effective in influencing real GDP at any time. B. are only effective in influencing real GDP during normal times. C. are only effective in influencing real GDP at times of a recession. D. can influence real GDP at normal times and times of a recession.
Which of the following represents ownership of a firm?
A) commodities B) stocks C) bonds D) loans E) short-term securities