A cartel is
A) a temporary storage facility for automobiles.
B) a group of firms that enter into an informal agreement to fix prices to maximize joint profits.
C) a group of firms that enter into a formal agreement to fix prices to maximize joint profits.
D) an example of a group of firms that collectively regulate a competitive industry.
Answer: C
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When the Fed buys U.S. government securities from a bank, that bank's excess reserves and total reserves increase, but there is no change in required reserves
a. True b. False Indicate whether the statement is true or false
Exhibit 20-5 Money, investment and product markets
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In Exhibit 20-5, a shift in aggregate demand from AD2 to AD3:
A. increases real GDP, and lowers the price level. B. decreases real GDP, and lowers the price level. C. increases real GDP, and raises the price level. D. decreases real GDP, and raises the price level.
What is measured on the horizontal axis when we draw a graph of the long-run aggregate supply curve?
A. real GDP B. production of capital goods C. the price level D. production of consumer goods
If the equilibrium level of GDP in a private open economy is $1,000 billion and consumption is $700 billion at that level of GDP, then:
A. saving must be $300 billion. B. net exports must be $300 billion. C. S + C must equal $300 billion. D. I g + X n must equal $300 billion.