Clothing retailers have faced greater competition in recent years as more firms have entered the clothing market. Some of the competition has come from foreign competitors, but much of it is domestic competition. As a result there is much competition in markets for many types of clothing and
A. individual buyers and sellers cannot affect the market price because it is determined by the market forces of demand and supply.
B. there are relatively few buyers and sellers in the market, and one individual firm can determine the market price.
C. firms have a great degree of flexibility in pricing their products because these products can be sold at a high profit level.
D. there are no other implications.
Answer: A
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What will be an ideal response?
If the IS curve is relatively steep, then
A) there can be no long-run tradeoff between inflation and unemployment. B) monetary policy cannot be very effective in changing GDP. C) rational expectations theory is probably correct. D) Ricardian equivalence most likely holds. E) budget deficits will not affect future capital accumulation.
Which of the following is NOT an explanation for the shape of the aggregate demand curve?
A. real balance effect B. investment effect C. interest rate effect D. open economy effect
The price of a certain farm product was $1.25 in the base period when the parity ratio was 100. If the index of prices paid by farmers is now at 140, then the parity price of this farm today should be:
A. $0.90 B. $1.50 C. $1.75 D. $2.00