Shocks to the economy occur when:
A. stock prices rise by more than 10 percent per year.
B. government takes a more active role in the economy.
C. prices are flexible.
D. actual economic events do not match what people expected.
Answer: D
You might also like to view...
What three conditions must hold for a firm to successfully price discriminate?
What will be an ideal response?
Rising health care spending is a problem confronting the federal government because
A) it is the government's job to make sure everyone receives the health care they need. B) federal spending on health care has increased rapidly over the last thirty years. C) the federal-funded VA hospitals have been expanding faster than government revenues can provide for. D) the medical expenses of federal employees has been rising at a rate much faster than for non-federal workers.
Market failure implies that
a. in the real word, the market fails to achieve equilibrium b. with an unequal distribution of income, the market will fail to provide sufficient goods to the poor c. when externalities are present, the market will fail to provide the socially optimal price and output d. negative externalities are greater than positive externalities so that the market fails to create an efficient outcome e. the inability of the market to solve the problem of unnecessary demand is caused by persuasive advertising
Suppose two firms are in a game situation, and they each must decide on a strategy regarding whether to select a high price or a low price. Profits for a firm are highest when it selects a low price, while the other selects a high price; profits are lowest if one selects a high price, while the other selects a low price; profits are in between when both select low prices; and profits are slightly higher when both select high prices. In the absence of collusion we expect
A. one of the firms to select a high price and the other a low price. B. one firm to select a high price and the other a low price in the first period, followed by a reversal in the second period. C. both to select high prices. D. both to select low prices.