There are a few firms in the automobile industry in Poorland. In order to prevent a price war, these firms have secretly agreed to charge a price 20% above the marginal cost of production. This is an example of ________
A) free riding
B) undercutting
C) collusion
D) cost-cutting
C
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How does real gross domestic product (GDP) differ from nominal GDP?
A) Nominal GDP can be used to directly compare the amount of output produced from year to year, while real GDP cannot be used for such comparison. B) Nominal GDP controls for price changes, while real GDP does not. C) Real GDP controls for price changes, while nominal GDP does not. D) There is no difference between nominal GDP and real GDP.
If the U.S. dollar depreciates in the foreign exchange market, American exports will be __________ and American imports will be __________
a. more expensive; more expensive b. cheaper; cheaper c. less expensive; less expensive d. less expensive; more expensive e. there will be no change
An advantage of a corporation is that
a. owners have limited liability for debt. b. the business is subject to little government regulation. c. owners pay fewer taxes than owners of other forms of business. d. owners have direct and immediate control over daily management of the business.
According to the Taylor rule, the Federal Reserve sets interest rates in response to:
A. the inflation rate and the current output gap. B. the current output gap and the target money supply growth. C. the S&P 500 index and the inflation rate. D. the inflation rate and the unemployment rate.