When actual output exceeds potential output there is ________ output gap and the rate of inflation will tend to ________.
A. an expansionary; increase
B. no; remain the same
C. an expansionary; decrease
D. a recessionary; increase
Answer: A
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Suppose that a monopolist must choose between two points on its demand curve; it can sell 100 units for $3 each, or it can sell 160 units for $2 each. Which of the following is true?
a. The monopolist is facing an elastic demand. b. The monopolist is facing unit elastic demand. c. The monopolist is facing inelastic demand. d. The monopolist is facing perfectly elastic demand. e. The elasticity of demand cannot be determined with the information given.
The United States is the world's leading grain-producing nation. Exporting grain causes the: a. domestic consumption of grain to rise because of the added foreign demand
b. price of grain in the domestic market to fall because foreigners are now taking some of the domestic demand. c. price of grain to domestic consumers to rise because of the added foreign demand. d. standard of living of foreigners to fall because of the lost purchasing power.
Price discrimination occurs only in monopolies
a. True b. False Indicate whether the statement is true or false
A price leader sets a price that ______.
a. undercuts the prices of the price followers b. aligns with the cartel agreement c. maximizes the concentration ratio d. maximizes its individual profit