Suppose equilibrium national income is currently at $800 billion and intended investment is $100 billion. If an increase in the interest rate reduces intended investment from $100 billion to $75 billion, and the MPC is 0.8, the new level of equilibrium national income will be

Refer to Figure 26-1. In the figure, the money demand curve would move from Money demand1 to Money demand2 if

A) the interest rate increased. B) the price level decreased. C) real GDP increased. D) the Federal Reserve sold Treasury securities.

In the Cournot model, if one firm increases its output

A) the market will not clear because now there is a surplus. B) the market price drops, reducing the revenues received by the other firms. C) the others will kick it out of the oligopoly. D) the other firms are unaffected.