Which of the following is NOT associated with a high degree of monopoly power?
A) A relatively inelastic demand curve for the firm
B) A small number of firms in the market
C) Significant price competition among firms in the market
D) Significant barriers to entry
Answer: C) Significant price competition among firms in the market
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The consumption function is the relationship between consumption and
A. disposable income. B. total spending. C. investment. D. planned aggregate expenditure.
An increase in the stock of capital contributes to economic growth because it increases
A) federal funds rates. B) labor productivity. C) tax revenues. D) the reserves of the banking system.
The Herfindahl-Hirschman Index will indicate that a contestable market is ________
A) a sequential market B) competitive C) uncompetitive D) a prisoners' dilemma
Which of the following best describes the "wealth effect"?
A) When the price level falls, the real value of household wealth falls. B) When the price level falls, the real value of household wealth rises. C) When the price level falls, the nominal value of household wealth rises. D) When the price level falls, the nominal value of household wealth falls.