Models that are similar to RBC models but allow for shocks other than productivity shocks are known as
A) DSGE models.
B) Keynesian models.
C) Solow models.
D) Friedman models.
A
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Limit pricing refers to
A) the fact that a monopoly firm always sets the highest price possible. B) how the price is determined in a kinked demand curve model of oligopoly. C) a situation in which a firm might lower its price to keep potential competitors from entering its market. D) none of the above.
The current exchange rate system for most currencies is described most accurately as one of
A. fixed exchange rates. B. freely flexible exchange rates. C. gold standard rates. D. dirty or managed floating.
Economists who believe that real GDP may grow slowly because of insufficient demand for investment spending cite three main reasons for the low demand for loanable funds. Which of the following is not one of those reasons?
A) a reduced demand for housing due to slowing population growth B) the continued decrease in the value of the dollar relative to the currencies of major U.S. trading partners C) a smaller capital requirement for modern information technology firms D) the falling price of capital relative to other goods
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Exhibit 30-4
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