Collusive action among producers creates higher prices for consumers because it:
A. causes overproduction and inefficiency.
B. creates negative externalities.
C. forces producers to be more competitive.
D. allows producers to artificially restrict their supply.
Answer: D
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When the economy is initially at full employment: a. contractionary monetary policy can result in increased real output, but only in the short run
b. contractionary monetary policy can result in increased real output in both the short run and long run. c. contractionary monetary policy can result in decreased real output, but only in the short run. d. contractionary monetary policy can result in decreased real output in both the short run and long run.
Which one of the following policies might the Fed initiate if it wanted to increase the money supply?
A. Sell government securities B. Increase the reserve requirement C. Increase the discount rate D. Decrease the reserve requirement
An industry with a large number of small firms producing a standardized product in a market with easy entry and exit of firms is:
What will be an ideal response?
In the above figure, if the firm is producing Q1 units at a price P1, the firm should
A. increase output and decrease price. B. decrease output and increase price. C. not change output or price. D. shut down.