A firm has market power if it can raise the price of its product and still sell product to customers.
Answer the following statement true (T) or false (F)
True
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Which of the following shifts the aggregate supply curve rightward? i. The money wage rate rises. ii. Potential GDP increases. iii. Government expenditure on goods and services increases
A) i only B) ii only C) iii only D) ii and iii E) i, ii, and iii
What are the three main lessons on crisis learned from early developing countries in Latin America?
A) choosing the right exchange rate regime, the importance of contagion and the importance of the banking system B) choosing the right real rate, the importance of following exchange rates, and keeping prices high to make the most profit C) pegging exchange rates with Euros, keeping labor cost and wages low D) maintaining money supply, avoiding tariffs, and increasing output E) maintaining money supply, avoiding inflation, and increasing production
Because banks engage in regulatory arbitrage, the Basel Accord on risk-based capital requirements may result in
A) reduced risk taking by banks. B) reduced supervision of banks by regulators. C) increased fraudulent behavior by banks. D) increased risk taking by banks.
Explain why advertising is very important to a monopolistically competitive firm but not to a perfectly competitive firm or a monopolistic firm