Which oligopoly model leads to price rigidity? Graphically show why.
What will be an ideal response?
Figure 13-5
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If inflation is higher than expected, this helps borrowers (by reducing the real interest rate they pay) and hurts lenders (by reducing the real interest rate they receive)
Indicate whether the statement is true or false
Which of the following can be described as direct finance?
A) You take out a mortgage from your local bank. B) You borrow $2500 from a friend. C) You buy shares of common stock in the secondary market. D) You buy shares in a mutual fund.
When the government fixes its exchange rate
a. it creates an unfavorable balance of trade b. it creates trade surpluses c. it does so to allow the exchange rate to reach equilibrium d. it acts as an arbitrager e. it is not unlike a government policy to control agricultural prices
Which of the following is true about the Bitcoin:
a. New Bitcoins are created by private, non-Bitcoin affiliated individuals (i.e., not Bitcoin employees) called miners, who solve computer algorithms to earn the newly created Bitcoins. b. New Bitcoins are created by the Bank of Bitcoin (BoB), which is (for all intents and purposes) the central bank in charge of Bitcoin's supply. c. New Bitcoins are created by Bitcoin Inc., which is a company, like Facebook or Microsoft, thathas developed this virtual currency. d. Bitcoin transactions are cleared through clearing houses, such as Mt. Gox. e. Bitcoin has a fixed exchange rate relative to the U.S. dollar and other currencies.