Which of the following will cause the aggregate demand curve to shift to the left?
A. A decrease in business taxes.
B. An improvement in technology.
C. A decrease in consumer and business confidence because of a terrorist attack.
D. A decrease in the interest rate.
Answer: C
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Suppose the price of beans rises from $1.00 a pound to $2.00 a pound, quantity demanded falls from 10 units to 6 units. In this example, the demand for beans is said to be
A) relatively elastic. B) relatively inelastic. C) perfectly elastic. D) perfectly inelastic.
Which of the following statements about a monopolistically competitive firm is FALSE?
A) It tries to differentiate its product from that of competitors. B) It may earn short-run economic profits. C) It produces the quantity at which MC=MR. D) It sets price like a perfectly competitive firm.
A cartel is a(n)
a. form of explicit collusion in which the parties collectively behave like a monopoly b. market that changes very little as firms enter and exit c. implicit pricing scheme that does not involve explicit communication between the parties d. form of nonprice competition e. group of firms engaged in price discrimination
Table 13.2ABC Bank Balance SheetAssetsLiabilitiesTotal reserves$80,000Transactions accounts$200,000Loans120,000??Refer to Table 13.2. If ABC Bank has a required reserve ratio of 15 percent, it can legally make a onetime maximum loan of
A. $80,000. B. $30,000. C. $40,000. D. $50,000.