A consumption-based theory of the determination of the real interest rate is based on the assumption that:
a. a rise in the real interest rate will increase current consumption
b. the real interest rate must adjust to make people willing to experience changing consumption levels over time.
c. the real interest rate is determined by the supply and demand for investment and is therefore unaffected by consumption decisions.
d. the real interest rate must be positive.
b
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Static effects are the overall growth in the market and the impact on a company caused by expanding production and by the company's ability to achieve greater economies of scale.
a. true b. false
If the exchange rate between the Chinese yuan and the U.S. dollar is 5 yuan for $1, then how much is each yuan worth in U.S. dollars?
a) $0.20 b) $1.50 c) $2 d) $5
Other things equal, cartels and similar collusive arrangements are easier to establish and maintain:
A. when there are ample opportunities for the firms to make secret price concessions to selected buyers. B. during periods of business-cycle stability and full employment. C. when the demand and cost conditions of the participating firms differ substantially. D. when the number of firms is relatively large.
The existence of public goods can be a source of market failure.
Answer the following statement true (T) or false (F)