Consider the following characteristics:
a. a market structure with barriers to entry
b. demand curves that are easily identified
c. firm cannot make zero profits in the long run
d. firm can reap long-run profits.
Which of the characteristics in the list above is shared by an oligopolist and a monopolist?
A) a, b, c, and d
B) a, b, and d
C) a, c, and d
D) a and d
Answer: D
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The above figure shows the Lorenz curve for wealth for the nation of Rusha. What percent of wealth is owned by the poorest quintile?
A) 0 percent B) 5 percent C) 20 percent D) 35 percent
In the ISLM framework, an expansionary monetary policy causes aggregate output to ________ and the interest rate to ________, everything else held constant
A) increase; increase B) increase; decrease C) decrease; decrease D) decrease; increase
One piece of evidence that business fluctuations are caused by demand-side changes would be that
A. monetary and fiscal policy will move inversely. B. interest rates and budget deficits will move inversely. C. unemployment and inflation will move inversely. D. unemployment and budget deficits will move inversely.
The slope of the IS curve will be flatter the __________ is the sensitivity of investment to a unit change in the interest rate and the __________ is marginal propensity to save
A) greater; larger B) greater; smaller C) less; larger D) less; smaller