When a firm cheats in a cartel, it assumes that:
a. other firms will also change their output.
b. other firms will not change their output.
c. the price of the good will not change
d. the price of the good will change.
b
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When a recession ends,
A) the household sector decreases spending substantially. B) interest rates decrease. C) households decrease spending on durable goods. D) firms increase the amount of borrowing.
In the simple Keynesian consumption function, consumption demand is
A) a function of disposable income alone. B) a function of disposable income and an autonomous component. C) simply an autonomous amount exogenous to the model. D) a function of the interest rate and an autonomous component. E) a function of the interest rate alone.
Monetarists argue that the Federal Reserve should allow the money supply to grow:
A. counter to the business cycles. B. faster than 10 percent annually. C. only during recessions. D. at a constant rate.
Related to the Economics in Practice on p. 683: According to the International Monetary Fund, the top debtor nation in 2013 was
A. Japan. B. China. C. the United States. D. Saudi Arabia.