A perfectly contestable market is one which a firm can enter and exit without losing its investment
a. True
b. False
Indicate whether the statement is true or false
True
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A reason why it is difficult for developing countries to maintain a cartel is that
A) the elasticity of demand for a cartel's output decreases over time. B) producers in the cartel have an economic incentive to cheat. C) economic profits discourage other producers from entering the industry. D) producers in the cartel have the motivation to lower prices but not to raise prices. E) tariffs allow producers in the cartel to produce items that make no profit.
The activists' paradise requires
A) that government expenditures follow a fairly steady growth path. B) the ability to forecast perfectly future changes in demand and effects of changes in policy. C) policy to have powerful direct effects but no side-effects. D) B and C are both correct.
Exhibit 17-1 Inflation and unemployment rates
In Exhibit 17-1, when the unemployment rate goes from 9 percent to 1.5 percent, the:
A. level of inflation is unaffected. B. inflation rate goes from 3 percent to 14 percent. C. inflation rate goes from 3 percent to 8 percent. D. inflation rate goes from 8 percent to 14 percent.
Money that can be used to purchase capital goods is known as
a. financial capital. b. profit. c. liquid capital. d. interest.