Like the monetarists, new classical economists favor
a. money growth aimed at achieving a nominal GDP target.
b. discretionary policy action.
c. a money growth rate that stabilizes output.
d. a money growth rule that guides monetary policy.
D
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The demand for cars in a certain country is given by: D = 20,000 - P, where P is the price of a car. Supply by domestic car producers is: S = 5,000 + 0.5P. If this economy is open to trade, and the world price of a car is $6,000, how many cars will be imported?
A. 3,000 B. 2,000 C. 4,000 D. 6,000
Everything else remaining unchanged, if a new seller enters a market to compete with an existing monopoly that is enjoying economies of scale, it will lead to:
A) higher profits for both firms. B) higher profits for the existing firm. C) lower profits for the existing firm. D) higher market power for the existing firm.
The market power of a firm refers to its ability to
A) erect entry barriers in the industry. B) make a profit even when other firms in the industry are making losses. C) control its own output level while keeping its price the same as the prices charged by other firms. D) affect the market price for its industry's output.
The prominence of employer-provided health insurance in the U.S. has had the following major consequences, except:
A. Overuse of health-care services B. Rapidly rising prices of health care C. Reform efforts have mostly focused on regulation of health insurance D. Heightened awareness of employees about the true costs of their health care