In the above figure, suppose the economy is at point a. If there is an increase in real GDP, there is a movement to point such as

As new firms enter a monopolistic competitive industry, it can be expected that:

a. market price will increase. b. the output of existing firms will increase. c. profits of existing firms will increase. d. market demand should decrease. e. profits of existing firms will decrease.

According to supply-side economists, lowering corporate income taxes:

a. results in wage hikes for employees but no economic growth. b. moves society toward greater income equality. c. checks the expansion of real GDP and employment. d. stimulates investment and economic growth. e. does not create enough incentive for producers to increase production.