If government spending is increased by $550 and taxes are increased by $550, the equilibrium level of income will
A. not change.
B. decrease by $550.
C. increase by $550.
D. increase by $1,100.
Answer: C
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When both firms have dominant strategies
A) the outcome is called a dominant strategy solution. B) joint profits are maximized. C) there are multiple Nash equilibria. D) there is a prisoners' dilemma.
A collusion occurs when firms act together to reduce output and keep prices high
a. True b. False Indicate whether the statement is true or false
The original (1958 ) Phillips curve stated that
A) unemployment and money wage rates move in the same direction. B) unemployment and money wage rates move in opposite directions. C) there is an inverse relationship between price inflation and unemployment D) there is a direct relationship between price inflation and unemployment. E) a and c
The "crowding-out effect" suggests that
A. tax increases are paid primarily out of saving and therefore are not an effective fiscal device. B. increases in government spending financed through borrowing will increase the interest rate and reduce private investment. C. it is very difficult to have excessive aggregate spending in our economy. D. consumer and investment spending always vary inversely.