Suppose a market is currently served by an incumbent firm. If a potential entrant can enter prior to the incumbent firm announcing its output (or price), the entrant will enter the market and force the incumbent to compete.
Answer the following statement true (T) or false (F)
False
Rationale: This only happens if fixed entry costs are sufficiently low.
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Which of the following describes the "invention" of banking?
A) Clergy in the Renaissance created the banking system to help further the growth of the church. B) Goldsmiths in the sixteenth century issued gold receipts which entitled its owners to reclaim their gold on demand. C) The United States government founded the Federal Reserve in 1913. D) The British Empire created a banking system to fund its exploration of the New World. E) Members of the New York Stock Exchange founded the Bank of America in the 1700s.
During the recession phase of the business cycle
A) unemployment is usually falling. B) production is usually rising. C) interest rates are usually falling. D) income is usually rising.
In an optimal two-part tariff pricing schedule, consumer surplus is zero
Indicate whether the statement is true or false
If the Fed purchases U.S. government securities, gross domestic product:
a. increases because the resulting increase in the interest rate leads to a decrease in investment. b. increases because the resulting decrease in the interest rate leads to an increase in investment. c. decreases because the resulting increase in the interest rate leads to a decrease in investment. d. decreases because the resulting increase in the interest rate leads to an increase in investment. e. decreases because the resulting decrease in the interest rate leads to an increase in investment.