In the 1990s, foreign direct investment had become the most important source of funds for developing countries
a. True
b. False
Indicate whether the statement is true or false
True
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In the short run, which one of the following causes a competitive firm to hire more labor?
A) an increase in wage rate B) an increase in the output price C) a specific tax imposed on the firm's output D) a decrease in the output price
Suppose market demand is p = 10 - Q. Firms have a fixed cost of five and no marginal cost. If firm A is the incumbent, can it deter the entry of its rival, firm B?
What will be an ideal response?
A firm is more likely to have a natural monopoly when:
A. the size of the market is small relative to the efficient scale of the firm. B. the size of the market is large relative to the efficient scale of the firm. C. the firms face no or low fixed costs. D. the government grants the firm an exclusive license to operate.
If there is a large increase in the price of oil and the Fed wishes to maintain stable output, which of the following should it do?
a. Do nothing, because the self-correcting mechanism will adjust the economy b. Sell bonds in the open market c. Wait, because output seldom changes when there is an increase in the price of oil d. Encourage firms to not adjust the wages they pay e. Buy bonds in the open market