In the market for bank credit, a large bank sometimes announces a change in interest rates. After the changes in interest rates are announced, other banks in the industry usually react by changing their rates in the same way. This is an example of:
A. monopolistic competition.
B. implicit collusion.
C. the kinked demand curve model.
D. a cartel.
Answer: B
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An important hindrance to developing countries in carrying out monetary policy is that they
a. usually lack central banks b. are usually unable to issue their own currency c. are unable to borrow money d. usually lack effective bond markets e. all of the above
If the government ran a major deficit, and there was no noticeable effect on the level of GDP, this could be taken as evidence of
a. crowding-in. b. structural deficit. c. crowding-out. d. monetary policy ineffectiveness.
If B represents resource markets and C represents households, then the flow from B to C is _____
a. revenue. b. expenditures. c. labor, capital, and natural resources. d. income. e. wages, interest, rent, and profit. check image at top
Which of the following is the BEST example of a monopsonist?
A) a household hiring a gardener B) a turnip farmer hiring seasonal help C) Hershey's Chocolate Factory in Hershey, PA D) Vinaka Coffee Shop in Carlsbad, CA