The trough occurs
A. at the peak of the business cycle.
B. at the bottom of the business cycle.
C. during the prosperity phase of the cycle.
D. more than twice in the same cycle.
B. at the bottom of the business cycle.
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Suppose that a pure monopoly calculates that at its present output level, marginal revenue is $1 and marginal cost is $2. The monopoly could maximize profits or minimize losses by ________.
A. increasing price and decreasing output B. increasing price and increasing output C. leaving price unchanged and decreasing output D. decreasing price and leaving output unchanged
Refer to the scenario above. What is the payoff to Firm B in equilibrium?
A) $2.6 million B) $0 C) $4 million D) $3 million
If money demand is extremely sensitive to changes in the interest rate, the money demand curve becomes almost horizontal. If the Fed expands the money supply under these circumstances, then the interest rate will
A) change very little and investment and consumer spending will change very little. B) rise substantially and investment and consumer spending will rise substantially. C) fall substantially and investment and consumer spending will fall substantially. D) fall substantially and investment and consumer spending will change very little.
The AD curve shows that as price increases, amount demanded will _________.
Fill in the blank(s) with the appropriate word(s).