An increase in the U.S. price level will:
a. increase U.S. exports
b. increase U.S. imports.
c. increase the quantity of RGDP demanded in the United States.
d. both (a) and (c)
b
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Answer the following statement true (T) or false (F)
1) Homogeneous oligopolists tend to advertise more than do differentiated oligopolists. 2) Oligopolists use limit pricing to maximize short-run profits. 3) Both collusive and noncollusive oligopoly models suggest that price changes will be relatively infrequent in these types of industries. 4) Collusion among firms always involves formal agreements. 5) Firms are more likely to collude when the economy is in a recession.
Answer the following questions true (T) or false (F)
1. The income effect of a price change refers to the change in the quantity demanded of a good that results from a change in the price of a complementary product. 2. If the price of peaches, a substitute for plums, decreases the demand for plums will increase. 3. An inferior good is a good for which the quantity demanded decreases as the price increases, holding everything else constant.