Industry A comprises only very few large firms engaged in stiff competition with each other. Industry A can best be described as
A) pure competition.
B) monopolistic competition.
C) pure monopoly.
D) oligopoly.
Answer: D
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Cost-push inflation can be started by
A) a decrease in the money wage rate. B) an increase in the money prices of raw materials. C) an increase in the quantity of money. D) an increase in government expenditure on goods and services. E) a decrease in government expenditure on goods and services.
If your real disposable income goes up by $1,000 per week, and your real consumption spending goes up by $800 per week, you have a marginal propensity to consume of
A) 0.2. B) 0.8. C) 1.2. D) 1.0.
Bond coupon payments represent
A) dividends paid to owners. B) interest on the amount borrowed. C) capital gains for tax purposes. D) payments to preferred shareholders.
Jane wants to save $1000 of current income. With an IRA, no taxes are paid on income or interest until the money is withdrawn in five years. Without an IRA, taxes must be paid whenever income or interest is received. Jane's federal/state tax bracket is 35%, and the nominal interest rate is 8%.(a)How much money will Jane have if she puts her money in an IRA and withdraws the money in five years?(b)How much money will Jane have if she does not put her money in an IRA, but rather in a regular (taxable) savings account, for five years?(c)How much does Jane gain in five years by using an IRA rather than a regular savings account?
What will be an ideal response?