Modern Keynesians differ from traditional Keynesians because modern Keynesians
A. Believe that failures of the economy are inherent in a capitalist economy.
B. Believe that tax cuts and government spending should be used to increase aggregate demand and output.
C. Favor fixed rules and steady, predictable policies.
D. Believe that monetary policy can be useful in managing the economy.
Answer: D
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Imagine a duopoly in which two firms, A and B, produce the monopoly profit-maximizing output and equally share the economic profit
If firm A increases its output, the market price ________ and total economic profit of the two firms combined ________. A) falls; decreases B) falls; increases C) rises; decreases D) rises; increases E) falls; does not change
If the monetary authorities persistently expand the money supply at a rapid rate, the probable result will be: a. inflation
b. low nominal interest rates. c. rapid growth of real GDP. d. all of the above.