In Exhibit 3-15, if the price moves from $2.00 to $1.00, unsold inventories will:
a. fall, putting upward pressure on price.
b. fall, putting less pressure on price.
c. rise, putting less pressure on price.
d. rise, putting upward pressure on price.
Answer: b. fall, putting less pressure on price.
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Real business cycle theory focuses on factors affecting
A. aggregate demand. B. the velocity of money. C. aggregate supply. D. consumer spending.
The demand for money will be high in an economy experiencing: a. a depression
b. hyperinflation. c. deflation. d. a recession. e. a sluggish population growth.
If a regulator forced a natural monopolist to set P = MC
A. the monopolist would break even. B. the monopolist would suffer economic losses. C. the monopolist would earn economic profits. D. the monopolist would earn monopolistic profits.
The discount rate is the rate of interest at which:
A. Federal Reserve Banks lend to commercial banks. B. savings and loan associations lend to some builders. C. Federal Reserve Banks lend to large corporations. D. commercial banks lend to large corporations.