The paradoxical nature of oligopoly can be demonstrated by the fact that, even though the monopoly outcome is best for the oligopolists,
a. they collude to set the output level equal to the Nash equilibrium level of output.
b. they have incentives to increase production above the monopoly outcome.
c. they do not behave as profit maximizers.
d. self-interest juxtaposes the profits earned at the Nash equilibrium.
b
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Assuming no change in the effective tax rate on capital, a decrease in the government budget deficit will reduce the current account deficit if and only if the decrease in the budget deficit
A) reduces desired national saving. B) increases desired national saving. C) reduces desired national investment. D) increases desired national investment.
Other things equal, when the real interest rate rises, C, I and NX ________ and real GDP will ________ relative to potential GDP
A) decrease; decrease B) decrease; increase C) increase; increase D) increase; decrease