Politicians will often be able to gain from support of trade restrictions because
What will be an ideal response?
organized interest groups benefiting from the restrictions will make large contributions to political campaigns while most others will not feel strongly about the restrictions.
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Predatory pricing occurs when a firm sells
A) above cost to any customers who have no good alternative. B) above cost to low-income customers who have no good alternative. C) at whatever prices the market will bear. D) below cost in order to eliminate competitors. E) only to customers who agree to rebate a portion of the price.
If the LM function is vertical, then __________ is constant
A) the price level B) the interest rate C) velocity D) investment
The equilibrium output level in the country of Plutonia is $40 billion, while its potential output is $60 billion. Suppose the central bank of the country implements an expansionary monetary policy. This is likely to lead to _____
a. an expansionary gap b. a liquidity trap c. disinflation d. inflation
If a firm uses labor to produce output, the firm's production function depicts the relationship between
a. the number of workers and the quantity of output. b. marginal product and marginal cost. c. the maximum quantity that the firm can produce as it adds more capital to a fixed quantity of labor. d. fixed inputs and variable inputs in the short run.