Which of the following describes monopolistic competition?
A) homogeneous products
B) All firms are price takers.
C) Advertising plays a key role.
D) There is only one seller in the industry.
Answer: C
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Bruce the Bank Manager can reduce interest rate risk by ________ the duration of the bank's assets to increase their rate sensitivity or, alternatively, ________ the duration of the bank's liabilities
A) shortening; lengthening B) shortening; shortening C) lengthening; lengthening D) lengthening; shortening
Suppose that a bond-financed deficit shifts the IS curve to the right, taking IS-LM equilibrium "northeast" from point A to point B
If government bonds are considered net wealth by the public sector, then by the portfolio theory of asset-holding there is an excess ________ money at point B because the LM curve has shifted ________ with increased wealth, and thus the fiscal policy turns out to be ________ expansionary than without the wealth effect. A) demand for, downward, more B) demand for, downward, less C) demand for, upward, less D) supply of, downward, more E) supply of, upward, more
The part of consumption that does NOT depend upon the level of disposable income is
A. autonomous consumption. B. savings. C. saving. D. average propensity to consume.
The taste-for-discrimination model examines an employer's prejudice and discrimination in hiring by using tools of:
A. Demand theory B. Theory of costs C. Production theory D. Profit theory