Which of the following is not a precondition for price discrimination?
A. The commodity involved must be a durable good.
B. The good or service cannot be profitably resold by original buyers.
C. The seller must be able to segment the market, that is, to distinguish buyers with different
elasticities of demand.
D. The seller must possess some degree of monopoly power.
Answer: A
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The Federal Reserve increases interest rates when it wants to reduce aggregate demand to fight inflation. How do increases in the interest rate reduce aggregate demand?
What will be an ideal response?
Under the Bretton Woods Agreement, the goal of the IMF was to
A) finance international transactions in gold. B) lend to countries experiencing balance of payment deficits. C) help less developed countries advertise their goods in the developed countries. D) provide oversight to the functioning of central banks in the member countries.
If the cross-price elasticity of demand is -3, then the goods are __________ and the consumers' responsiveness would be characterized as __________
a. substitutes; inelastic b. substitutes; elastic c. substitutes; unit elastic d. complements; inelastic e. complements; elastic
You withdraw $100 from your checking account. How does this affect the money supply and the reserves of your bank?
a. The money supply increases, and the reserves of your bank decline. b. Both money supply and the reserves of your bank increase. c. There is no change in the money supply, and the reserves of your bank decline. d. The money supply decreases, and the reserves of your bank increase.