To eliminate an inflationary gap, the expenditure schedule should
a. shift upward.
b. shift downward.
c. become flatter.
d. become steeper.
b
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Franco Modigliani has found that an expansionary monetary policy can cause stock market prices to ________ and consumption to ________
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
Suppose there is only one gas station within hundreds of miles. The owner finds that when she charges $3 a gallon, she sells 199 gallons a day, and when she charges $2.99 a gallon, she sells 200 gallons a day. The owner, obviously, is ________ and the marginal revenue of the 200th gallon of gas is __________
a. a perfect competitor (because all gas stations are perfect substitutes); $.01 b. a monopolist; $1 c. a monopolist; $2.99 d. in monopolistic competition (because gas is perceived as a differentiated product); $3 e. in monopolistic competition (because gas is perceived as a differentiated product); $600