I need help determining the answers to the attached (multiple choice 2). I narrowed answers down to 2 but then get lost. Thank youDocument Preview:1. Suppose an oligopoly consists of two firms. Firm A lowers price and Firm B responds by lowering its price by the same amount. If average costs and industry output remain the same, which of the following will occur? A) Barriers to entry will come tumbling down and new firms will enter. B) The profits of the two firms will remain the same. C) The profits of the two firms will increase. D) The profits of the two firms will decrease 2. If GDP falls, A) income and production must both rise. B) income must rise, but production may rise or fall. C) income and production must both fall. D) none of the above. 3. Capacity utilization increases. What is the impact on aggregate expenditures and income? A) Both increase. B) Both decrease. C) Aggregate expenditure increases and income decreases. D) Aggregate expenditure decreases and income increases 4. In the short-run along the horizontal portion of the short-run aggregate supply curve, an increase in the budget deficit and an expansionary monetary policy would: A) increase both the price level and real income. B) increase real income only. C) increase the price level only. D) none of the above 5. In the money market, an excess demand of money will: A) increase the supply of bonds, increase bonds prices, and increase interest rates. B) increase the supply of bonds, decrease bond prices, and decrease interest rates. C) increase the supply of bonds, increase bond prices, and decrease interest rates. D) increase the supply of bonds, decrease bond prices, and increase interest rates 6. To maximize joint profits, a cartel must determine the level of output at which: A) joint marginal revenue equals the marginal cost of the smallest member of the cartel. B) the horizontally sum of the members marginal cost curves is at a minimum. C) joint marginal revenue equals the marginal cost of the largest member of the cartel. D) marginal Attachments: multiple-choi.docx