The aggregate demand curve shows a ________ relationship between ________ and total quantity of output ________.
A) positive; the interest rate; demanded
B) negative; the price level; supplied
C) positive; the price level; demanded
D) negative; the price level; demanded
Answer: D) negative; the price level; demanded
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Following the downgrade of U.S. debt by Standard & Poor's in August, 2011:
A) other rating agencies also downgraded U.S. debt B) interest rates spiked as investor's perception of risk increased C) investors didn't seem to be any more concerned about default risk than before the downgrade D) the U.S. implemented a plan to significantly reduce its budget deficit later that year
One of the limitation of Five Forces is that they
a. Reduce producer surplus b. For one firm to increase profit, the profit of another participant must decrease c. Does not provide a firm with sustainable competitive advantage d. Both b and c
The marginal cost of a dollar of loanable funds is not
a. the interest rate b. the same as the marginal physical product of capital c. a measure of the marginal cost of capital d. equal to the marginal revenue product of capital at the firm's profit-maximizing quantity of loanable funds e. the change in a firm's total cost that results from adding one more dollar of loanable funds to production
If three firms of similar sizes join to form a cartel, then it is most likely that
A. all three firms will stop producing. B. they will collectively produce more than before. C. all three firms will earn zero profits. D. they will charge a common, higher market price.