Increases in government spending or tax cuts normally
A. pushes interest rates up.
B. pulls interest rates down.
C. has no impact on interest rates.
D. none of these.
Answer: A
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A labor union that consists of workers from a particular industry is a(n)
A) closed shop. B) industrial union. C) union shop. D) bilateral monopoly.
The most important reason for the increasing prominence of the corporation was:
a. protection from creditors. b. that some businesses required more capital than one person or a few people could provide. c. the use of "double liability." d. None of the above
Megan, an analyst in Ronald's team called in sick on a day when 4 projects were due for completion. Ronald divided Megan's work between the remaining six team-members. Which form of governance is being used here?
a. Etiquette b. Hierarchy c. Contract d. Market
There are two firms in the residential paint industry, Cool Shades (C) and Warm Hues (W). They collude to share the market equally. They jointly set a monopoly price and split the quantity demanded at that price. Here are their options:
i. They continue to collude (no cheating) and make $36 million each in profits. ii. One firm cheats and the other does not. The firm that cheats makes a profit of $42 million whereas the firm that doesn't makes a profit of $27 million. iii. They both cheat and each firm makes a profit of $21 million. a. Construct a payoff matrix for these two firms. b. How does this situation relate to the prisoner's dilemma? c. If each firm acted noncooperatively, how much profit would each make? d. Are the firms better off colluding (with no cheating) or competing? Explain.