All of the following can create an oligopolistic structure EXCEPT
A. government licensing rules.
B. economies of scale.
C. low barriers to entry.
D. mergers.
Answer: C
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If the real interest rate increases, there is
A) an upward shift of the consumption function. B) a movement downward along consumption function. C) a change in the slope of the consumption function. D) a movement upward along the consumption function. E) a downward shift of the consumption function.
The ability to lower the average costs over total production as more products are introduced
a. Economies of scale b. Economies of Scope c. Diseconomies of Scale d. Diseconomies of Scope
Suppose Bond X has an original price of $1,000 and a coupon rate of 8% and therefore is worth $1,080 after a year. The market has now changed so that other bonds are selling with a coupon rate of 12%. How would you calculate the right price to pay for Bond X?
a. Calculate the dollar figure that would generate $1,120 at the current interest rate and pay no more than that for the bond. b. The right price for a bond is always the face value plus the interest rate for one year. c. With a 12% coupon rate, the bond’s face value is now $880, so pay no more than that for the bond. d. Calculate the dollar figure that would generate $1,080 at an interest rate of 12% and pay no more than that for the bond.
Assume that the central bank lowers the discount to increase the nation's monetary base. If the nation has highly mobile international capital markets and a fixed exchange rate system, what happens to the real risk-free interest rate and monetary base in the context of the Three-Sector-Model? State your answer after the macroeconomic system returns to complete equilibrium
a. The real risk-free interest rate rises and monetary base rises. b. The real risk-free interest rate falls and monetary base falls. c. The real risk-free interest rate rises and monetary base falls. d. The real risk-free interest rate and monetary base remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.