The kinked demand curve model is based on the assumption that firms' pricing decisions are independent of one another because demand is determined by non-market forces
Indicate whether the statement is true or false
FALSE
You might also like to view...
Refer to the diagram. Rational expectations theory says that a fully anticipated decrease in aggregate demand from AD 2 to AD 1 will:
A. move the economy from a to b to c.
B. shift the AS curve to the left.
C. move the economy from c to a new equilibrium at b.
D. move the economy directly from c to a.
Unless goods are Giffen goods, own-price elasticities of demand are always negative.
Answer the following statement true (T) or false (F)
A decrease in the required reserve ratio will increase banks' excess reserves and decrease the money multiplier
a. True b. False Indicate whether the statement is true or false
The figures in the table below are for a single commercial bank. All figures are in thousands of dollars.
Refer to the data given above. If the required reserve ratio is 10 percent, the bank has excess reserves of:
A. $28,000
B. $22,000
C. $18,000
D. $16,000