Each of the following is implied if we say that transactions costs are absent EXCEPT:
A. sellers can easily communicate their prices.
B. buyers can easily locate suppliers and learn their prices.
C. buyers and sellers can arrange transactions without significant obstacles.
D. sellers do not charge a markup over marginal cost.
D. sellers do not charge a markup over marginal cost.
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The democratic political process operating at the national level tends to result in
A) balanced budgets. B) deficits. C) surpluses. D) surpluses alternating with deficits in a countercyclical manner.
Suppose that the production function for the economy is: Y = AK1/4L3/4. Assume that A = 1,000, the current capital stock is $32,000 billion, and the labor force is 120 million (or 0.120 billion) workers
All else equal, if the capital stock increased by $8,000, the value of the marginal product of labor will be A) $18,021.09. B) $20,223.24. C) $21,625.30. D) $60,070.29.
The new Keynesian sticky-price theory indicates that an increase in aggregate demand generates
A) a speedy rise in real GDP but a sluggish increase in the price level. B) a speedy rise in the price level but a sluggish increase in real GDP. C) sluggish increases in both real GDP and the price level. D) rapid increases in both real GDP and the price level.
Borrowing in foreign currencies to spend or invest domestically,
a. decreases demand for the domestic currency, appreciating the domestic currency b. increases demand for the domestic currency, depreciating the domestic currency c. increases demand for the domestic currency, appreciating the domestic currency d. does not affect the exchange rates