In an oligopoly market, the Nash Equilibrium
a. is a stable outcome despite providing a lower total profit level.
b. leads to zero economic profit once the equilibrium is reached.
c. results in a output level below that for a monopoly
d. always result in the maximum profit for all firms.
a
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The four components of aggregate expenditure are
A. consumption, investment, government transfers, and net interest. B. spending on durable goods, inventory investment, government debt, and net exports. C. spending on domestic goods, domestic services, foreign goods, and foreign services. D. consumption, investment, government purchases, and net exports.
"Demand deposits" in commercial banks are
A) assets of both the non-bank public and the banks. B) assets of the depositors and liabilities of the banks. C) liabilities of the non-bank public and of the banks. D) liabilities of the non-bank public and assets of the banks.
Suppose that there is a positive aggregate demand shock and the central bank commits to an inflation rate target. But if the commitment is not credible, then
A) the public's expected inflation will remain unchanged. B) the short-run aggregate supply curve will rise. C) over time inflation will fall back down to the inflation target. D) all of the above. E) both A and B.
Ziva is an organic lettuce farmer, but she also spends part of her day as a professional organizing consultant. As a consultant, Ziva helps people organize their houses. Due to the popularity of her home-organization services, Farmer Ziva has more clients requesting her services than she has time to help if she maintains her farming business. Farmer Ziva charges $25 an hour for her
home-organization services. One spring day, Ziva spends 10 hours in her fields planting $130 worth of seeds on her farm. She expects that the seeds she planted will yield $300 worth of lettuce. Ziva's accountant would calculate the total cost for the day of farming to equal a. $25. b. $130. c. $300. d. $380.