"A monopolist can charge whatever price it wants." Do you agree or disagree? Why?
What will be an ideal response?
Disagree. The monopolist is limited by the demand curve it faces. Even a monopolist produces a good that has substitutes, even if they are imperfect substitutes. The more substitutes and the better some of them are as substitutes, the more elastic the demand curve of the monopolist.
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The process by which banks screen potential applicants by eliminating bad risks and to obtain a pool of creditworthy borrowers is called:
A) gap analysis B) duration analysis C) credit-risk analysis D) liquidity analysis
In an inflationary atmosphere that everyone anticipates will persist, lenders will
A) desire a lower nominal interest rate to increase the real rate. B) desire a higher nominal interest rate to protect against the inflation. C) tend to see the real rate of interest increase, particularly if the inflation is unforeseen. D) have the real rate of interest guaranteed by the Federal Reserve Board.
A risk premium is
A. lower the more risky the future stream of profits. B. an additional compensation paid to the workers of a business enterprise. C. subtracted from the discount rate when calculating the present value of a future stream of profits. D. a measure calculated to reflect the riskiness of future profits.
Based on the figure below. Starting from long-run equilibrium at point C, a tax cut that increases aggregate demand from AD to AD1 will lead to a short-run equilibrium at point ________ and eventually to a long-run equilibrium at point ________, if left to self-correcting tendencies. 
A. D; C B. B; C C. B; A D. D; B