A monopoly's economic profit is protected by the lack of entry of new firms even in the long run
Indicate whether the statement is true or false
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Suppose an oil cartel has an agreement to restrict members' production in order to maintain a price of $30 per barrel. A single cartel member may want to cheat and exceed its quota so that it can:
a. reduce its costs. b. charge higher prices. c. make demand more inelastic. d. earn a bigger profit.
According to purchasing-power parity, if the price of a basket of goods in the U.S. rose from $1,500 to $2,000 and the price of the same basket of goods rose from 600 units of some other country's currency to 1,000 units of that country's currency, then the
a. nominal exchange rate would appreciate. b. nominal exchange rate would depreciate. c. real exchange rate would appreciate. d. real exchange rate would depreciate.
A permanent reduction in net exports leads to
A. a proportional increase in real Gross Domestic Product (GDP). B. a more than proportional decrease in real Gross Domestic Product (GDP). C. a reduction in taxes, autonomous government spending, and a fall in real Gross Domestic Product (GDP). D. a less than proportional decrease in real Gross Domestic Product (GDP).
If real GDP in 2016 using 2015 prices is lower than nominal GDP of 2016, then
A. prices in 2016 are lower than prices in 2015. B. nominal GDP in 2016 equals nominal GDP in 2015. C. real GDP in 2016 is larger than real GDP in 2015. D. prices in 2016 are higher than prices in 2015.