If the Federal Reserve targets the interest rate and the money demand curve shifts to the left, then the Fed
A) can maintain the interest rate target, but at a higher quantity of the money supply.
B) cannot maintain the interest rate target.
C) can maintain the interest rate target with no change in the money supply.
D) can maintain the interest rate target, but at a lower quantity of the money supply.
D
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The tax multiplier
A) is negative. B) is a measure of how much taxes will fall when income is falling. C) is larger in absolute value as compared to the government spending multiplier. D) is always less than one.
Suppose Cournot duopolists firms face the same market demand curve, but have differing costs. At the Nash-Cournot equilibrium, the firm with the lower cost will
A) have a lower price for its product than its competitor. B) produce a smaller output than its competitor. C) have a higher price for its product than its competitor. D) produce a larger output than its competitor.