Firms improve their market positions over time through which of the following?
(A) path dependence
(B) the innovation cycle
(C) core rigidities
(D) imitating other firms
Answer: (B) the innovation cycle
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Because interest rates have substantial fluctuations, the ________ theory of the demand for money indicates that velocity has substantial fluctuations as well
A) classical B) Cambridge C) liquidity preference D) Pigouvian
Everything else held constant, an increase in wealth will cause the holdings of checkable deposits to the holdings of currency to ________ and the currency ratio will ________
A) increase; increase B) increase; decrease C) decrease; increase D) decrease; decrease
Input efficiency:
A. means that holding constant the total amount of each input used in the economy, there is no way to increase any firm's output without decreasing the output of another firm. B. is not a requirement of Pareto efficiency in a production economy. C. exists when it is possible to produce more of one good and at least as much of every other good using the same inputs. D. is the same as efficient efficiency.
As the interest rate increases, consumers will tend to increase their amount of saving due to
a. increased profit b. their greater reliance on borrowing c. the lower opportunity cost of current consumption d. diminishing marginal utility e. the higher opportunity cost of current consumption