Based on this graph for the welfare effects of a subsidy, when does the deadweight loss start?
a. when the demand rises above the quantity at E1
b. when the supply rises above the quantity at E1
c. when the supply rises above the quantity at E2
d. when the demand drops below the quantity at E2
b. when the supply rises above the quantity at E1
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Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real GDP and reserve-related (central bank) transactions in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. Real GDP remains the same and reserve-related (central bank) transactions becomes more positive (or less negative). b. Real GDP falls and reserve-related (central bank) transactions remains the same. c. Real GDP and reserve-related (central bank) transactions remain the same. d. Real GDP rises and reserve-related (central bank) transactions remains the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
Refer to the game theory matrix where the numerical data show the profits resulting from alternative combinations of advertising strategies for Ajax and Acme. Ajax's profits are shown in the upper right part of each cell; Acme's profits are shown in the lower left. Without collusion, the outcome of the game:
A. maximizes joint profits for the firms.
B. results in a prisoner's dilemma.
C. results in greater economic efficiency.
D. forces one or more firms out of the industry.