Many gourmet shops go out of business during recessions since they sell almost exclusively:
A. substitutes.
B. normal goods.
C. inferior goods.
D. complements.
Answer: B
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Crowding out, following an increase in government spending, results from (the exchange rate is the foreign exchange price of the domestic currency)
A) higher interest rates and a lower exchange rate. B) lower interest rates and a lower exchange rate. C) lower interest rates and a higher exchange rate. D) higher interest rates and a higher exchange rate.
In the long run, firms in a competitive market
A) shut down because profit goes to zero. B) lose money. C) are not profit maximizing. D) earn zero economic profit.
The private information revealed during screening typically refers to information:
A. that is personal. B. that is embarrassing. C. that is not public. D. that individuals generally do not want anyone to find out.
When manufacturers and distributors establish credible commitments to one another, they often employ
a. vertical requirements contracts b. third-party monitoring c. credible threat mechanisms d. non-price tactics