True/False/Uncertain statements. State first whether each is TRUE/FALSE/UNCERTAIN and then briefly justify your answer. 6. In a monopolistically competitive market, competition ensures that in the long-run each firm in the market produces efficiently. 7. A perfectly competitive firm should shut down production in the short-run and exit the market if its total revenues are less than its total costs. 8. In a Cournot Oligopoly the best strategy of a firm is to increase the quantity produced every time the competitor reduces its quantity produced. 9. If the value of exports exceeds the value of imports, the government's tax receipts must exceed its expenditure. 10. In a closed economy with unemployed resources, if the government increases both its expenditure and its lump-sum direct tax by the same amount, there will be no increase in national income. 11. In an IS/LM fixed-price closed economy, fiscal policy will be more effective the flatter is the LM curve. 12. An increase in the ratio of cash to deposits held by the commercial banks will reduce the money supply.
