Obstacles that make it difficult or impossible for would-be producers to enter a market are known as:
A.) Barriers to entry.
B.) Monopoly profits.
C.) Entry blockades.
D.) Entry tariffs.
A.) Barriers to entry.
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The government's providing of deposit insurance and functioning as the lender of last resort has significantly:
A. increased the incentive for banks to take on risk, but has had no effect on the amount of regulation of banks required. B. decreased the incentive for bank managers to take on risk. C. increased the amount of regulation of banks required and increased the incentive for banks to take on risk. D. increased the amount of regulation of banks required, but has had no effect on bank's incentive to take on risk.
If productivity growth in Japan exceeds productivity growth in the U.S., to the point that the resource cost in ALL Japanese industries is lower than in the U.S., then
A. there is no feasible way for the U.S. and Japan to continue to trade. B. mutually beneficial trade is possible. C. trade between the U.S. and Japan is possible, but only Japan will benefit from it. D. trade between the U.S. and Japan is possible, but only the U.S. will benefit from it.
Assume the Expectation Hypothesis regarding the term structure of interest rates is correct. Then, if the current one-year interest rate is 4% and the two-year interest rate is 6%, then investors are expecting the future one-year rate to be:
A. 8%. B. 6%. C. 5%. D. 4%.
The price of A falls by 2 percent, and the quantity demanded of A increases by 2 percent. Meanwhile, the quantity demanded of B increases by 2 percent too. We would conclude that
A. demand for A is elastic, and A and B are substitutes. B. demand for A is unit-elastic, and A and B are complements. C. demand for A is inelastic, and A and B are unrelated. D. demand for A is elastic, and A and B are complements.