Answer the following statement(s) true (T) or false (F)
1. An attorney that finds a loophole in a law has formed a creative response to the law.
2. The amount of output produced by two firms in a Cournot oligopoly setting is greater than that produced by a monopoly, but smaller than that which would be produced if the market were perfectly competitive.
3. According to the Bertrand model, price and output is higher under oligopoly than under competition.
4. A firm has monopoly power when it is the single seller of a good or service.
5. If a monopoly desires to raise its profits, it can simply raise the price it charges.
1. True
2. True
3. False
4. False
5. False
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Demand deposits are termed so because:
A) depositors can withdraw money from such deposits at any point of time. B) there are no limitations on the amount of money that can be deposited into such accounts. C) depositors can demand any rate of interest on such deposits. D) most consumers want to open such accounts as they are greatly in demand.
Suppose that in 2011, 3 million plasma TVs were purchased at $950 each, while in 2012, 4 million plasma TVs were purchased at $800 each. What might have caused this change?
A) There were fewer workers in plasma TV manufacturing. B) The price of LCD TVs (a substitute for plasma TVs) rose. C) The price of LCD TVs (a substitute for plasma TVs) fell. D) There was an advance in plasma TV manufacturing technology.
Time lags occur when which of the following questions is asked?
A) Where is the economy now? B) Where is the economy going? C) How long will it take for a correct policy to be implemented? D) All of the above. E) None of the above.
"The rigid link between monetary growth and inflation . . . had been broken." M1 grew faster in the deflationary 1980s than in the inflationary 1970s. Why?
A) The demand for money increased, reducing spending. B) The demand for money decreased, due to financial deregulation. C) The demand for money increased, as did velocity. D) The demand for money decreased and the Fed targeted the money supply.