Which of the following is characteristics is common to both monopoly and monopolistic competition? A) Ease of entry into the industry. B) Firms are price setters. C) A relatively large number of sellers. D) Long-run economic profit equals 0. ANSWER B
Date: September 10th, 2020
Economic variables that generally turn down before a recession begins and turn back up before the recovery starts are called: A) leading indicators. B) coincident indicators. C) lagging indicators. D) none of the above. ANSWER A
Date: September 10th, 2020
If expectations are formed rationally, then individuals A) will have a forecast that is 100% accurate all of the time. B) change their forecast when faced with new information. C) use only the information from past data on a single variable to form their forecast. D) have forecast errors that are persistently low. ANSWER […]
Date: September 10th, 2020
Explain how the value of marginal cost affects the values of average variable cost and average total cost and what this means for the relationship between the marginal cost curve and the average variable and total cost curves. What will be an ideal response? ANSWER So long as the value of marginal cost is […]
Date: September 10th, 2020
An example of economies of scale in the provision of financial services is A) investing in a diversified collection of assets. B) providing depositors with a variety of savings certificates. C) hiring more support staff so that customers don’t have to wait so long for assistance. D) spreading the cost of writing a standardized contract […]
Date: September 10th, 2020
Everything else held constant, an autonomous monetary policy tightening ________ aggregate ________. A) increases; demand B) decreases; demand C) decreases; supply D) increases; supply ANSWER B
Date: September 10th, 2020
If the interest rate is 5%, what is the present value of a security that pays you $1, 050 next year and $1,102.50 two years from now? If this security sold for $2200, is the yield to maturity greater or less than 5%? Why? What will be an ideal response? ANSWER PV = $1,050/(1. […]
Date: September 10th, 2020
In the long-run, an increase in the budget deficit and an expansionary monetary policy would: A) increase the price level only. B) increase both the price level and real income. C) increase real income only. D) none of the above. ANSWER A
Date: September 10th, 2020
Suppose that there is a negative aggregate demand shock and the central bank commits to an inflation rate target. If the commitment is credible, then A) the public’s expected inflation will remain unchanged. B) the short-run aggregate supply curve will rise. C) over time inflation will fall. D) all of the above. E) both A […]
Date: September 10th, 2020
Which of the following would be least likely to lead the Justice Department and the FTC to block a proposed horizontal merger? A) A finding that the resulting firm might be able to unilaterally affect price and output. B) A finding that the potential for entry into the market by new firms would be adversely […]
Date: September 10th, 2020
