Comment on the following statement: "In an oligopoly, the behavior of any one firm depends on the reaction it expects of all the others in the industry."
What will be an ideal response?
The statement is true. Because of the small number of firms in the industry, each firm must form a strategy based on the actions it expects its competitors to take. This leads to a large amount of interdependence among the firms in oligopolistic industries.
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Refer to Figure 26-11. In the dynamic model of AD-AS in the figure above, if the economy is at point A in year 1 and is expected to go to point B in year 2, the Federal Reserve would most likely
A) decrease interest rates. B) not change interest rates. C) decrease the inflation rate. D) increase interest rates.
The U.S. poverty rate is higher among households headed by black married couples than those headed by white females
a. True b. False
The government wishes to close an inflationary gap by reducing real GDP by $400 billion. Assuming a tax multiplier of 4 and an income multiplier of 5, which of the following policy prescriptions would reduce the inflationary gap by $400 billion?
A. Decreasing government spending by $400 billion and increasing taxes by $400 billion. B. Decreasing government spending by $160 billion and decreasing taxes by $100 billion. C. Decreasing government spending by $40 billion and decreasing taxes by $40 billion. D. Decreasing government spending by $80 billion and keeping taxes the same.
The difference between technology and technological change is that
A) technology refers to the processes used by a firm to transform inputs into output while technological change is a change in a firm's ability to produce a given level of output with a given quantity of inputs. B) technology is carried out by firms producing physical goods but technological change is an intellectual exercise into seeking ways to improve production. C) technology is product-centered, that is, developing new products with our limited resources while technological change is process-centered in that it focuses on developing new production techniques. D) technology involves the use of capital equipment while technological change requires the use of brain power.