The time gap between a nation's decision to implement a corrective economic policy and the actual results of the policy is known as the:
A) inside lag.
B) inside lapse.
C) outside lag.
D) outside lapse.
Answer: C) outside lag.
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Price discrimination takes place when a firm
A) charges the same price for all the units of its product that it sells. B) charges different prices for different units of its product. C) is discriminated against by consumers. D) None of the above answers is correct.
Depositors have a strong incentive to show up first to withdraw their funds during a bank crisis because banks operate on a
A) last-in, first-out constraint. B) sequential service constraint. C) double-coincidence of wants constraint. D) everyone-shares-equally constraint.
When competing firms have a commitment strategy, it is called:
A. collusion. B. competitive cooperation. C. predatory pricing. D. competition.
Suppose that the only maker of a particular type of horse hair clothing exits the industry because demand is too low. The correct analysis of this situation is that
a. the producer's decision is irrational, since monopolies are not limited by the demand curve b. the producer's decision is irrational, since monopolies never go out of business c. the producer's decision is irrational, since it could simply raise the price d. the price received by the producer was lower than the marginal cost in the long run e. the price received by the producer was lower than the average total cost in the long run