Assume a firm has decided to undertake a limit pricing strategy. For the strategy to be successful, the firm does not need to actually possess a cost advantage over potential entrants
Rather, the firm simply has to be able to convince potential entrants that it does, in fact, possess an advantage. Indicate whether the statement is true or false
FALSE
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Which of the following would you expect to decrease both interest rates and exchange rates? (Assume exchange rates are stated in terms of foreign currency per domestic currency.)
A) contractionary monetary policy B) contractionary fiscal policy C) expansionary monetary policy D) Both B and C will decrease both interest rates and exchange rates.
If the Fed buys a T-bill from an individual rather than from a bank, the effect on the money supply is
A. smaller because there is no multiplier process. B. larger because of the multiplier process. C. the same. D. impossible to predict without knowing the value of the multiplier.
Money is always neutral. This statement is most likely to be made by a proponent of the
a. new Keynesian model. b. monetarist model. c. real business cycle model. d. classical model. e. both c and d.
The "free-rider problem" of public goods refers to a. individuals' refusal to pay taxes
b. individuals' attempts to hide their preferences for collective goods and to avoid paying for them. c. individuals' overuse of collective goods. d. the inelasticity of individuals' demands for public goods.