Which of the following is NOT a feature of monopolistic competition?
A. inability of firms to enter or exit the market
B. sales promotion and advertising
C. significant numbers of sellers in a highly competitive market
D. differentiated products
Answer: A
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Which of the following is a TRUE statement about the relationship between the price of bonds and the interest rate?
A) The prices of bonds are directly related to the interest rate. B) The prices of bonds increase when the interest rates rise. C) The prices of bonds are unrelated to the interest rate. D) The prices of bonds are inversely related to the interest rate.
The government builds a new water-treatment plant. The owner of the company that builds the plant pays her workers. The workers increase their spending. Firms from which the workers buy goods increase their output. This type of effect on spending illustrates
a. the multiplier effect. b. the crowding-out effect. c. the Fisher effect. d. the wealth effect.
One year into the crisis, Argentina's interest payments were roughly equal to
A) 100 percent of exports. B) 60 percent of exports. C) 45 percent of exports. D) 10 percent of exports.
When people change their minds about what they want simply because of the timing of the decision, economists refer to it as:
A. cost-price inconsistency. B. information overload paradox. C. time inconsistency. D. time barriers to optimization.