When oligopolistic firms in an industry form a cartel, then it is most likely that
A) both industry output and prices will increase.
B) both industry output and prices will decrease.
C) industry output will increase while prices will decrease.
D) industry output will decrease while prices will increase.
Answer: D
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Automatic stabilizers
A) are never altered. B) often make any downturn in the economy worse. C) must be determined by the Congress in each budget. D) work counter-cyclically to moderate the business cycle.
Under a system of flexible exchange rates, in the long run, a nation's balance on current account and capital account transactions will
a. increase continuously. b. decrease continuously. c. tend to net out to zero, indicating a balance between the debits and credits. d. tend to increase if the nation is running a balance of trade surplus and decrease if it is running a balance of trade deficit.