Competition is more likely to exist when:
A. there is free entry into and exit out of industries.
B. products are produced by a few large firms.
C. there is a single supplier of all goods and services.
D. the government purchases most goods and services.
Answer: A
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Friedman's theory of money demand differs from Keynes' in that
a. Friedman assumes that the demand for money is highly elastic while Keynes assumes money demand is inelastic. b. Friedman assumes that the money demand function is highly stable while Keynes assumes it is unstable. c. Friedman assumes that there is only a speculative demand for money while Keynes also considers the precautionary and transactionary demands for money. d. Friedman assumes that the proportion of income held in the form of money is constant while Keynes believes it varies. e. both b and d.
Suppose that the nation wide average cost of air pollution generated by a car is $1,000. Would a tax of $1,000 on every car induce people to take external costs into consideration and bring about the optimal price and output for autos? Explain
What will be an ideal response?
A speculative attack is the result of investors' expectations that the future value of a currency will decline.
Indicate whether the statement is true or false
The demand for most products varies directly with changes in consumer incomes. Such products are known as:
A. inferior goods. B. competitive goods. C. complementary goods. D. normal goods.