A cartel is
a. a type of formal collusion.
b. a type of informal collusion.
c. characterized by a kinked demand curve.
d. a form of monopolistic competition.
a. a type of formal collusion.
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Initially the nominal interest rate is 8 percent and the inflation rate is 5 percent. People know that the inflation rate increases to 10 percent. What is the new nominal interest rate?
A) 8 percent B) 3 percent C) 13 percent D) 11 percent
According to the natural rate hypothesis: a. a short-term as well as long-term trade-off exists between unemployment and inflation
b. economic fluctuations are the result of external negative and positive productivity shocks to the economy c. workers and consumers incorporate the likely consequences of government policy changes into their expectations by quickly adjusting wages and prices. d. the economy will self-correct to the natural rate of unemployment.
Figure 2-2
Assume that U.S. agricultural land is used either to raise cattle for beef or to grow wheat. represents the production possibility frontier for beef and wheat. Between points F and G, the opportunity cost increasing wheat by two bushels equals
a.
0.25 million pounds of beef
b.
1.75 million pounds of beef
c.
0.125 pounds of beef
d.
8.0 pounds of beef
e.
0.5 pounds of beef
Which of the following statements is correct?
A. From the bank’s point of view, loans to customers are assets of the bank. B. From the bank’s point of view, loans to customers are liabilities of the bank. C. From the customer’s point of view, loans to customers are assets of the customer. D. From the customer’s point of view, loans to customers are liabilities of the customer. E. a and b only F. a and d only