What is the one thing that all firms in an imperfectly competitive market have in common?
What will be an ideal response?
All firms in an imperfectly competitive market exercise market power, which allows them to raise price without losing all demand for their product.
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Which of the following statements is true?
A) If a bank lends a sum of $600 to a firm, the sum is a part of the bank's liability. B) If a bank lends a sum of $200 to a household, the sum is a part of the bank's liability. C) If a firm deposits a sum of $500 in a bank, the sum is a part of the bank's assets. D) If a firm deposits a sum of $500 in a bank, the sum is a part of the bank's liability.
Which of the following statements is NOT true?
A) Unemployment in the US economy represents an excess demand for labor. B) A surplus may be reduced by shifting the demand curve rightward. C) A surplus may be reduced by shifting both the supply and demand curves. D) A shortage may be reduced by shifting the supply rightward.
Assuming sticky prices and given expectations of future exchange rates, what is the short-run effect on the exchange rate of the U.S. dollar (purchasing euros) and on domestic and foreign rates of return if there is a temporary increase in the quantity of U.S. dollars?
a. Rates of return on domestic and foreign assets diverge, as the dollar appreciates. b. Domestic and foreign rates of return both fall, as the dollar depreciates. c. Domestic and foreign rates of return converge, as the dollar depreciation lowers returns for U.S. investors who purchase euro-based assets. d. Rates of return on euro assets fall, causing investors to switch into U.S. assets and, therefore, the U.S. dollar appreciates against the euro.
If a hurricane were to wipe out the majority of the eastern seaboard in the United States:
A. neither the short-run nor long-run aggregate supply curves would be affected. B. only the long-run aggregate supply curve would shift left. C. only the short-run aggregate supply curve would shift left. D. the long-run and short-run aggregate supply curves would both shift left.