When a monopolistically competitive firm lowers it price one bad thing happens to the firm. What is this "one bad thing" called?

A) the output effect
B) the income effect
C) the substitution effect
D) the price effect

Answer: D

Economics

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The marginal propensity to consume is: a. the relationship between a change in consumption and a change in income. b. the relationship between a change in consumption and a change in saving. c. the relationship between changes in consumption and changes in net wealth. d. the ratio of income to consumption at any given level of income

e. the ratio of total consumption to total saving.

Economics

The Keynesian cause-and-effect sequence predicts that a decrease in the money supply will cause interest rates to:

A. fall, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP. B. fall, boosting investment and shifting the AD curve rightward, leading to a decrease in real GDP. C. rise, cutting investment and shifting the AD curve leftward, leading to a decrease in real GDP. D. rise, boosting investment and shifting the AD curve rightward, leading to an increase in real GDP.

Economics