A Tax Cut Shifts the Aggregate Demand Curve the Farthest

question 94

Multiple Choice

A tax cut shifts the aggregate demand curve the farthest if

• A)the MPC is large and if the tax cut is permanent.
• B)the MPC is large and if the tax cut is temporary.
• C)the MPC is small and if the tax cut is permanent.
• D)the MPC is small and if the tax cut is temporary.

Describe and calculate the Herfindahl-Hirschman Index (HHI) and its implications for market concentration.

Comprehend the role of economies of scale as a source of oligopoly.

Identify the conditions under which collusion among firms might occur and its legal implications.

Explain the effects of cartel formation on output and profits in an oligopoly.

---

Definitions:

Constructive Conflict

Disagreement that leads to productive discussions, problem-solving, and improvement rather than destructive outcomes.

Tendency

A predisposition or inclination towards a particular pattern of thought, behavior, or action.

Avoid

Refers to deliberately staying away from or preventing something from happening.

Suppress

To intentionally withhold or conceal information, feelings, or actions.