Action taken by the Fed to reduce the money supply will tend, all other things unchanged,
A) to reduce investment.
B) to increase investment.
C) to have no effect on net exports.
D) to increase real GDP and the price level.
Ans: A) to reduce investment.
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Is there a first-mover advantage in the Bertrand duopoly model with homogenous products?
A) Yes, first-movers always hold the advantage over other firms. B) Yes, first-movers may have an advantage, but it depends on the model assumptions. C) No, first-movers cannot choose a profit maximizing quantity because the second-mover can always produce a bit less and earn higher profits. D) No, the second-mover would be able to set a slightly lower price and capture the full market share.
The adjustment of the ____________ is the rationing mechanism in market economies.
A. price B. competition C. government D. None of the choices are correct.