The aggregate demand multiplier effect says that an initial increase in expenditure plans leads to an induced
A) increase in consumption expenditure.
B) increase in production expenditure.
C) increase in government expenditures on goods and services.
D) decrease in the price level.
E) increase in exports.
A
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The above figure shows the payoff matrix facing an incumbent firm and a potential entrant. Assuming a fixed cost of entry, the incumbent will deter entry because
A) it is more profitable than accommodating entry. B) it increases consumer surplus. C) the potential entrant winds up with zero profit. D) the incumbent would earn zero profit if it accommodated entry.
To combat the undersupply of public goods, a solution is:
A. to change social norms around consumption of the good. B. for the government to step in and provide it directly. C. put a quota on the amount that people can consume. D. to place a quota on the consumption of the good.