Which of the following is LEAST likely to be an outcome of a cartel as compared to the situation before the cartel was formed?
A) Cartel members charge higher prices.
B) Cartel members reduce production.
C) Cartel members make fewer profits.
D) Cartel members do not compete with each other in pricing decisions.
Answer: C
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When the Fed engages in an open market purchase, the money supply ________ and the nominal interest rate ________.
A. increases; increases B. decreases; increases D decreases; decreases C. increases; decreases
For which of the following time periods did the U.S. have a budget surplus?
a. 1990-1993 b. 1998-2001 c. 2003-2006 d. The U.S. did not have a surplus in any of these time periods.
Direct financing is distinguished from indirect financing because:
a. Direct financing is when a business borrows directly from pooled funds at a financial institution, and indirect financing is when it borrows in the bond or stock market. b. Direct financing is when a company borrows in the fixed-rate market, and indirect financing is when it borrows in the floating-rate market. c. Direct financing is when a business borrows in the bond or stock market, and indirect financing is when it borrows from pooled funds at a financial institution. d. None of the above.
Why does the GDP deflator give a different rate of inflation than the CPI?