When a firm prices its goods below the marginal cost to drive away competitors, it is referred as

Refer to Figure 19-4. The equilibrium exchange rate is at A, $3/pound. Suppose the British government pegs its currency at $4/pound. At the pegged exchange rate,

A) there is a surplus of pounds equal to 600 million. B) there is a shortage of pounds equal to 200 million. C) there is a surplus of pounds equal to 400 million. D) there is a shortage of pounds equal to 400 million. E) there is a shortage of pounds equal to 600 million.

Elimination of the corporate income tax would ________ government saving and probably ________ private business saving

A) increase, increase B) increase, decrease C) decrease, increase D) decrease, decrease