The four-firm concentration ratio for an industry is
a. the number of firms in the industry, divided by four.
b. the share of industry output sold by the four largest firms in the industry.
c. the percentage of total industry profits claimed by the four largest firms.
d. the share of industry output sold by the fourth largest firm in the industry.
b
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Specialization and division of labor are made easier by the existence of money.
Answer the following statement true (T) or false (F)
If a household’s income declines, then its budget line is
A. unaffected. B. going to be steeper. C. shift parallel, closer to the origin. D. shift parallel, further away from the origin. E. become more concave toward the origin.
Refer to Figure 23-3. Suppose that government spending increases, shifting up the aggregate expenditure line. GDP increases from GDP1 to GDP2, and this amount is $200 billion. If the MPC is 0.8, then what is the distance between N and L or by how much did government spending change?
A) $16 billion B) $40 billion C) $200 billion D) $1,000 billion
Self correcting mechanism reveals that
a. real wages will increase if there is an increase in price. b. nominal wages will fall if there is inflationary gap. c. nominal wages will increase if there is recessionary gap. d. in the long run economy will be in equilibrium at potential GDP.