When firms are faced with making strategic choices to maximize profit, economists typically use
a. the theory of monopoly to model their behavior.
b. the theory of aggressive competition to model their behavior.
c. game theory to model their behavior.
d. cartel theory to model their behavior.
c
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In the new classical view, an anticipated decrease in government spending would be expected to
a. lower output and the price level. b. lower output but leave the price level unchanged. c. leave output unchanged and raise the price level. d. leave output unchanged and lower the price level. e. leave both output and the price level unchanged.
When a company's stock is owned by thousands of individuals,
a. management will be very independent. b. management will be lacking. c. individuals will band together to socialize the firm. d. management will be prevented by government from taking any risks.