In the classical model, if money growth and velocity are constant, then:
a. the price level will rise at the rate of output growth.
b. the price level will be constant.
c. the price level will fall at the rate of output growth.
d. none of the above.
C
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Suppose a monopoly's inverse demand curve is P = 100 -Q, it produces a product with a constant marginal cost of 20, and it has no fixed costs. How much more or less is the deadweight loss if the monopoly can practice perfect price discrimination compared to it practicing uniform pricing?
A) The deadweight loss is smaller by 800. B) The deadweight loss is greater by 800. C) The deadweight loss is smaller by 1600. D) The deadweight loss is greater by 1600.
A reduction in aggregate demand will normally reduce
a. prices. b. real GDP. c. employment. d. All of the above are correct.