A high degree of concentration in a market suggests that firms in that market:
A. have the power to control prices.
B. are perfectly competitive.
C. cannot act strategically.
D. have formed an illegal cartel.
Answer: A
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Crowding out is the tendency for increased government deficits to:
A. increase consumption spending. B. increase investment spending. C. reduce investment spending. D. reduce consumption spending.
The development of new products through research and development in new growth theory is important because
A) new patents are created. B) there can be a positive impact on future growth. C) society's scarce resources are being used when they could be used for current consumption. D) it will lead to a reduction in the savings rate.
Which of the following will cause a movement upward along a supply curve?
a. Increases in raw-material costs. b. Increases in labor costs. c. Increases in the cost of machinery. d. Increases in the market price of a good, other things being equal.
The concept of the monetary policy rule is based on the assumption that:
A. discretionary fiscal policy crowds out investment spending. B. the natural rate of unemployment is constant in the long run. C. monetary policy lags are shorter than fiscal policy lags. D. the velocity of money is constant in the short run.