Why do monopolistic firms practice international dumping?
a. They face the same demand conditions in their domestic and foreign markets.
b. They face more elastic demand conditions in their domestic market than in their foreign markets.
c. They face more elastic demand conditions in their foreign market than in their domestic market.
d. They are able to take advantage of increasing costs.
Ans: c. They face more elastic demand conditions in their foreign market than in their domestic market.
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Which of the following can be concluded about the long-run performance of the U.S. economy? a. It has been able to create employment opportunities but only at the cost of high inflation. b. It has failed to generate sufficient aggregate demand in the economy
c. It has been one of the most productive economies in the world in terms of growth in real GDP. d. It has focused fiscal policies mostly at improving aggregate supply. e. It has suffered from huge fiscal deficits that dampened economic growth.
The purchase of stocks and bonds is included in which component of GDP?
a. saving b. investment c. consumer spending d. They are not included in GDP.
When a tax is imposed on a good for which the demand is relatively elastic and the supply is relatively inelastic,
a. buyers of the good will bear most of the burden of the tax. b. sellers of the good will bear most of the burden of the tax. c. buyers and sellers will each bear 50 percent of the burden of the tax. d. the effective price paid by buyers will decrease as a result of the tax.
The opportunity cost of holding money
a. decreases when the interest rate decreases, so people desire to hold more of it. b. decreases when the interest rate decreases, so people desire to hold less of it. c. increases when the interest rate decreases, so people desire to hold more of it. d. increases when the interest rate decreases, so people desire to hold less of it.