Firms in a cartel have an incentive to cheat on the cartel agreement because they suspect the other firms are cheating as well.
Answer the following statement true (T) or false (F)
False
Rationale: The incentive to cheat is there even if firms believe all other firms abide by the cartel agreement.
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Suppose real GDP was 100 in year 1 and 105 in year 2. The growth rate of real GDP is
A) 0.5 percent. B) 1.5 percent. C) 2.5 percent. D) 5 percent.
The combination of a successful wage push by workers and the government's commitment to high employment leads to
A) demand-pull inflation. B) supply-side inflation. C) supply-shock inflation. D) cost-push inflation.
In Fisher's model of the determination of the rate of return, the price of a "future good" is:
a. less than the price of a current good if the interest rate is negative. b. equal to the price of a current good if the interest rate is positive. c. greater than the price of a current good if the interest rate is positive. d. less than the price of a current good if the interest rate is positive.
Suppose the government wants to encourage Americans to exercise more, so it imposes a binding price ceiling on the market for in-home treadmills. As a result,
a. the demand for treadmills will increase. b. the supply of treadmills will decrease. c. a shortage of treadmills will develop. d. All of the above are correct.