Suppose business confidence decreases causing a reduction in investment. Based on our understanding of the model presented in Chapter 3, we know with certainty that a reduction in investment will cause
A) an increase in the multiplier.
B) a reduction in the multiplier.
C) a reduction in the marginal propensity to save.
D) a reduction in consumption as the economy adjusts to this decrease in investment.
D
Economics
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Every firm that has the ability to affect the price of the good or service it sells will
A) earn a short-run profit but break even in the long run. B) shut down in the short run. C) have a marginal revenue curve that lies below its demand curve. D) have a perfectly elastic demand curve.
Economics
A monopoly has
a. A perfectly elastic demand curve b. A perfectly elastic supply curve c. A downward sloping demand curve d. A upward sloping demand curve
Economics