The interest rate is determined by
a. government pronouncements.
b. market forces of supply and demand.
c. banks and lenders.
d. managers of large corporations.
b
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The marginal propensity to save (MPS) is equal to
A) MPC + 1. B) 1 + MPC. C) 1 - MPC. D) MPC - 1.
All of the following are characteristics of a perfectly competitive market EXCEPT
A) homogeneous products. B) large number of buyers and sellers. C) buyers and seller have equal access to information. D) high barriers to entry and exit.
Cartel members have an incentive to cheat because
a. the cartel does not maximize profit b. the cartel price is the competitive price c. each member's output quota is more than the output it would produce as a non-cartel member d. each member's MR is greater than the cartel's MC e. industry economic profit would be higher under competitive conditions
If a government price control succeeds in affecting price, it can be expected to lead to a corresponding
a. decrease in the quantity of sales only if the price is forced down. b. decrease in the quantity of sales if the price is forced down and an increase in the volume of sales if the price is forced up. c. decrease in the quantity of sales whether the price is forced up or down. d. increase in the quantity of sales whether the price is forced up or down.