Perfectly competitive markets are characterized by pronounced barriers to entry
a. True
b. False
Indicate whether the statement is true or false
False
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The common currency of the Economic Monetary Union is the
a. franc. b. pound. c. euro. d. mark.
When actual output equals potential output and the inflation rate is equal to the expected rate of inflation, the economy is said to be in ________ equilibrium.
A. long-run B. recessionary C. short-run D. expansionary
Assume that the real rate of interest is 5 percent and a lender charges a nominal interest rate of 15 percent. If a borrower expects that the rate of inflation next year will be 10 percent and the actual rate of inflation next year is 12 percent:
A. neither the borrower nor the lender benefits from inflation. B. both the borrower and the lender lose from inflation. C. the borrower benefits from inflation, while the lender loses from inflation. D. the lender benefits from inflation, while the borrower loses from inflation.
Regulation of a natural monopoly that forces it to price and produce as if it were a competitive firm results in
A. higher profits for the monopoly. B. economic losses for the monopoly. C. a highly unstable marketplace. D. the market being instantly competitive.