Firms that face downward-sloping demand curves for their output in the product market are called
A) price takers.
B) price dictators.
C) monopolists.
D) price makers.
Answer: D
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If nominal interest rates have a lower bound of zero and deflation occurs at 3% (i.e., the inflation rate equals -3%, then the lowest real interest rate possible is
A) -3%. B) 0%. C) 3%. D) 6%.
Is there a first-mover advantage in the Bertrand duopoly model with homogenous products?
A) Yes, first-movers always hold the advantage over other firms. B) Yes, first-movers may have an advantage, but it depends on the model assumptions. C) No, first-movers cannot choose a profit maximizing quantity because the second-mover can always produce a bit less and earn higher profits. D) No, the second-mover would be able to set a slightly lower price and capture the full market share.
Which of the following environmental problems is among the least-easily solved?
A. waste water treatment B. the world's global warming issues C. a nation's coastal water pollution issues D. a nation's air pollution issues
The Fed's countercyclical policy during expansion and prosperity includes:
A. raising the required reserve ratio, raising the discount rate, and selling government bonds on the open market. B. raising the required reserve ratio, raising the discount rate, and buying government bonds on the open market. C. raising the required reserve ratio, cutting the discount rate, and selling government bonds on the open market. D. lowering the required reserve ratio, cutting the discount rate, and buying government bonds on the open market.