An increase or decrease in taxes will have a multiplier effect on equilibrium GDP on the demand side.

Oligopolies exist and do not attract new rivals because

A) of barriers to entry. B) there can be no product differentiation. C) of competition. D) the firms keep profits and prices so low that no rivals are attracted.

In the simple deposit expansion model, a decline in checkable deposits of $500 when the required reserve ratio is equal to 10 percent implies that the Fed

A) sold $500 in government bonds. B) sold $50 in government bonds. C) purchased $50 in government bonds. D) purchased $500 in government bonds.