There are many different models of oligopoly because:
A. firms do not maximize profits in oligopolistic competition.
B. beliefs are not incorporated in oligopolistic competition and oligopoly is the most complicated type of market structure.
C. beliefs are not incorporated in oligopolistic competition.
D. oligopoly is the most complicated type of market structure.
Answer: D
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In the figure above, the shift in the aggregate demand curve from AD1 to AD3 could be the result of
A) a decrease in the real interest rate. B) a decrease in the buying power of money. C) an increased expectation of a recession that lowers the expected rate of profit from investment. D) a decrease in the foreign exchange rate. E) an increase in the price level.
Special Drawing Rights
A) are granted by the Fed to banks which want to trade in the foreign exchange markets. B) were eliminated when the Bretton Woods system broke down. C) are created by the IMF in its role as lender of last resort. D) were created by the Nixon administration on August 15, 1971.
Economic theory and history indicate that open elections and democratically elected governments
a. are unique in their ability to produce good economic institutions. b. must be accompanied by economic institutions that will allocate resources efficiently, or otherwise democratic institutions will not survive. c. reflect only transactions that are based on mutual agreement and voluntary exchange. d. are unable to guarantee either the emergence or continuation of economic institutions and policies that will encourage productive behavior.
Suppose the following: (1 ) the wage rate falls, (2 ) business taxes decline, (3 ) any change in SRAS is greater than any change in AD. Based on this information, in the short run Real GDP will __________ and the price level will __________
A) rise; rise B) fall; rise C) fall; fall D) rise; fall E) none of the above