The business-stealing externality states that entry of a new firms imposes a cost on existing firms because they lose customers
a. True
b. False
Indicate whether the statement is true or false
True
You might also like to view...
According to Edward Chamberlin, is the "differentness" of products a waste of resources? Explain
What will be an ideal response?
How does government expenditure discourage some private investment?
Without a change in target inflation, anything that shifts the aggregate demand curve to the right will cause:
A. a temporary increase in output. B. an increase in output in the long run. C. a permanent reduction in inflation. D. a temporary decrease in inflation.
Imagine that you are an economist and a believer in rational expectations theory. The chairwoman of your country’s central bank is considering announcing a series of three increases in the money supply over the next year. Her hope is that this will drive real GDP higher. What would you advise the chairwoman?
a. Proceed with the announcement. b. Proceed with the announcement but increase the money supply by smaller amounts once a month. c. Do not increase the money supply as it will boost inflation without improving real GDP. d. Do not increase the money supply as it will reduce real GDP instead of improving it.