A measure of monopoly power used by the government is the
A) percentage share of the relevant market or market share test.
B) profit of the firm compared to other firms in the industry.
C) price charged by the firm for goods and services.
D) percentage difference between price and marginal cost.
Answer: A
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The economy pictured in the figure has a(n) ________ gap with a short-run equilibrium combination of inflation and output indicated by point ________. 
A. recessionary; A B. recessionary; C C. recessionary; B D. expansionary; A
In year 1, the Consumer Price Index was 120 and the average nominal income was $30,000. In year 2, the Consumer Price Index was 125 and the average nominal level of income was $32,000. What happened to real income from year 1 to year 2?
A. It fell by $400. B. It rose by $600. C. It rose by $400. D. It rose by $2,000.
Suppose a person cashes his payroll check and holds all the funds in the form of currency. Everything else held constant, total reserves in the banking system ________ and the monetary base ________
A) remain unchanged; increases B) decrease; increases C) decrease; remains unchanged D) decrease; decreases
The difference between M1 and M2 is significant. Which of the following best describes the difference? a. M1 is nearly three times as large as M2
b. M2 is made up mostly of demand and checkable deposits. c. M2 is substantially larger than M1. d. None of the above.