Product differentiation can be used by firms to do all of the following except
A. provide consumers with commitment devices.
B. erect barriers to entry for potential firms.
C. gain complete control over the price of their product.
D. gain market share.
Answer: C
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According to the circular flow model, ________.
A. net investment must equal gross investment B. income must equal expenditures C. exports must equal imports D. saving must equal investment
When the unemployment rate is less than the natural unemployment rate, real GDP is ________ potential GDP
A) greater than B) unrelated to C) not comparable to D) equal to E) less than
Which of the following is an important difference between government and privately-owned enterprises?
A) Government can distribute goods without employing discriminatory rationing criteria. B) Government can more easily use negative incentives to obtain resources. C) Government does not produce exchangeable commodities or services. D) Government provides services at a lower opportunity cost. E) Government tends to pay close attention to the varying preferences of the people.
Economic growth in India has averaged about 8.5 percent in recent years and while inflation averaged almost 9 percent. The AS-AD model shows this process as
A) rightward shifts in the short-run aggregate supply curve. B) rightward shifts in the both the aggregate demand and long-run aggregate supply curves. C) movements upward along the aggregate demand curve. D) rightward shifts in the aggregate demand curve and leftward shifts in the short-run aggregate supply curve.