Which of the following is an example of implicit collusion?
A) product differentiation
B) a retaliation strategy
C) a second-price auction
D) price leadership
Answer: D
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
An accurate demand curve can be derived by examining the quantities of a good that are sold over time as the price varies.
Answer the following statement true (T) or false (F)
When the Social Security system begins running a deficit, the bonds in the trust fund will be drawn down. The funds to redeem these bonds will have to come from
a. higher taxes, spending reductions in other programs, or additional government borrowing. b. the surplus funds deposited in governmental banking accounts. c. equity capital being liquidated. d. the sale of private equities and securities that the government has been purchasing with the funds.
If the demand for a good increases at the same time the supply of the good decreases, what happens to equilibrium price and quantity?
A. Equilibrium quantity increases, but the effect on equilibrium price is ambiguous. B. Equilibrium quantity decreases, but the effect on equilibrium price is ambiguous. C. Equilibrium price increases, but the effect on equilibrium quantity is ambiguous. D. Equilibrium price decreases, but the effect on equilibrium quantity is ambiguous.