In the 1960s, the monetarist school of thought held that
A) monetary and fiscal policy could explain most of the output fluctuations in U.S. history.
B) there is a long-run tradeoff between inflation and unemployment.
C) efforts to fine-tune the economy are likely to do more harm than good.
D) all of the above
E) none of the above
C
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Bert and Ernie are noncolluding oligopolists. If both choose a high price strategy, each makes $40 in profits; if both choose a low price strategy, each makes $30 in profits. If Bert chooses a high price strategy and Ernie chooses a low price strategy, Bert makes $20 in profits and Ernie makes $60 in profits, while if Bert chooses a low price strategy and Ernie chooses a high price strategy, Bert
makes $60 in profits and Ernie makes $20 in profits. Which combination of pricing strategies would you expect Bert and Ernie to adopt if they act independently? a. Both choose a high price strategy. b. Both choose a low price strategy. c. Bert chooses a high price strategy and Ernie chooses a low price strategy. d. Bert chooses a low price strategy and Ernie chooses a high price strategy.
Which of the following is a correct statement of the impacts of a lump-sum tax?
A. Disposable income will increase by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC. B. Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the multiplier. C. Disposable income will decline by the amount of the tax and consumption at each level of GDP will also decline by the amount of the tax. D. Disposable income will decline by the amount of the tax and consumption at each level of GDP will decline by the amount of the tax multiplied by the MPC.