The stability of consumption over the business cycle and the ability of changes in the real interest rate to redirect aggregate demand indicate that
a. government policy can improve the performance of the economy.
b. market economies are inherently unstable.
c. a market economy has a self-correcting mechanism that will help guide it toward full employment.
d. recessions will be lengthy, and high rates of unemployment will persist for a period of time even after the economy recovers.
C
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Encouraging formation of monopolies provides firms an incentive to:
A) innovate. B) increase social surplus. C) hire less resources in production. D) decrease deadweight loss.
____________ also known as cash cards are computerized banking transactions, they remove money directly from your account
a. Credit cards b. Debit cards c. Smart cards d. Access cards
Suppose milk and cereal are compliments and the demand for milk is Qdm = 40 - 6Pm - 2Pc, where Qdm stands for millions of gallons of milk demanded, Pm stands for the price of milk and Pc stands for the price of cereal. The supply of milk is Qsm = 6Pm - 8, where Qsm stands for millions of gallons of milk supplied. The demand and supply of cereal are Qdc = 90 - 5Pc - Pm and Qsc = 5Pc - 10, respectively, where Qdc stands for millions of boxes of cereal demanded and Qsc stands for millions of boxes of cereal supplied. Suppose the government imposes a $2.00 per gallon tax on milk. The supply function for milk becomes:
A. Qsm = 4Pm - 6. B. Qsm = 6Pm - 6. C. Qsm = 6Pm - 20. D. Qsm = 6Pm - 10.
Provide two circumstances where monopoly may offer efficiency advantages over competition