Successful tacit collusion is most likely to arise among oligopolistic firms when they:
a. are all the same size.
b. all have the same production costs.
c. do not have a means of engaging in nonprice competition.
d. each play the tit for tat strategy.
Ans: d. each play the tit for tat strategy.
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Indicate whether the statement is true or false
Strong evidence of convergence exists for ________
A) wealthy nations that belong to the Organization for Economic Cooperation and Development B) both rich and poor nations C) sub-Saharan African economies and the economies of North America D) European and Caribbean economies
If UIP holds, the foreign interest rate is 6%, and the home currency is expected to appreciate by 2%, then the home interest rate is:
a. 10% b. 8% c. 4% d. 3%
Savers may prefer to use financial intermediaries rather than lending directly to borrowers because financial intermediaries:
A. increase the risk of lending. B. offer higher rates of return than available elsewhere. C. have a monopoly on lending. D. reduce the cost of gathering information about borrowers.