How can governments intervene in trade?
A) by not buying products from competing countries
B) by helping reduce economic uncertainty
C) by producing cheaper products
D) all of the above
B
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In the DuPont cellophane case, rivals accused DuPont of monopolizing cellophane. DuPont claimed that the relevant market was flexible wrapping material, such as wax paper and aluminum foil, rather than just cellophane. DuPont won the case. What type of evidence constituted DuPont’s defense?
What will be an ideal response?
According to the liquidity premium theory, the yield curve normally has a positive slope because
A) short-term interest rates are expected to rise. B) term premiums rise as the time to maturity increases. C) risk premiums rise over time. D) long-term bonds are more liquid than short-term bonds.
If policymakers decrease aggregate demand, then in the short run the price level
a. falls and unemployment rises. b. and unemployment fall. c. and unemployment rise. d. rises and unemployment falls.
Banks with excellent credit can borrow ________ from the Federal Reserve.
A. an unlimited amount B. $1,000,000 per year C. only an amount equal to their deposits D. $1,000,000 per day