The problem for a central bank setting a zero inflation policy would be:
A. firms would have to cut the nominal wage to reduce the real wage.
B. economic growth would also have to be zero.
C. it is impossible to have zero inflation.
D. the risk of high employment.
Answer: A
You might also like to view...
An efficient market is one in which
a. no rents are created. b. past prices can be used to predict the levels of future prices. c. the principals can fully monitor the actions of their agents. d. the price fully reflects all available information.
Kate and Alice are small-town ready-mix concrete duopolists. The market demand function is Qd = 20,000 - 200P, where P is the price of a cubic yard of concrete and Qd is the number of cubic yards demanded per year. Marginal cost is $80 per cubic yard. The Cournot model describes the competition in this market. How much does Kate produce in the Nash equilibrium?
A. 2,000 B. 1,333.33 C. 800 D. 4,000
Why are many oligopolistic market outcomes conveniently described by a Prisoners' Dilemma?
A) The firms can always achieve the outcome that maximizes joint outcomes. B) The firms could do better than the Nash equilibrium if they collude. C) The outcome of a Prisoners' Dilemma is always efficient. D) The outcome of a Prisoners' Dilemma is always identical to the perfectly competitive outcome.
In an economist’s view, a cartel usually offers to society
A. all the cost benefits of large-scale production and none of the allocative inefficiencies of monopoly. B. all the cost benefits of large-scale production and all of the allocative inefficiencies of monopoly. C. none of the cost benefits of large-scale production and none of the allocative inefficiencies of monopoly. D. none of the cost benefits of large-scale production and all of the allocative inefficiencies of monopoly.