A contestable market is one where there are few if any barriers to entry.
Answer the following statement true (T) or false (F)
True
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A contractionary monetary policy can reduce real GDP if expectations are formed rationally and monetary policy is
A) combined with expansionary fiscal policy. B) carried out in total secrecy. C) publicly announced and credible. D) combined with contractionary fiscal policy.
Suppose Bright Orange is large firm that grows and harvests oranges. Each orange yields 2 ounces of orange juice and exactly one orange peel. Bright Orange sells the orange juice to juice distributors and the orange peels to fragrance companies. The market demand for Bright Orange's oranges is equal to ________.
A) the demand for orange peels only B) the demand for orange juice plus the demand for orange peels C) the demand for orange juice only D) the difference between the demand for orange peels and orange juice
The marginal rate of substitution between two goods is given by:
A. the inverse of the slope of an indifference curve. B. the slope of a line tangent to an indifference curve. C. negative one times the inverse of the slope of an indifference curve. D. negative one times the slope of a line tangent to an indifference curve.
Suppose policy makers want to increase NX and keep Y constant. Which of the following policies would most likely achieve this?
A) a reduction in government spending B) a real depreciation C) a reduction in government spending and a reduction in the real exchange rate D) a reduction in the real exchange rate and a tax cut