Suppose an oligopolistic firm raises the price of its output. Demand for the firm's output will be relatively price ________ if the other dominant firms in the market ________
A) elastic; do not raise price
B) unit elastic; do not raise price
C) inelastic; also raise price
D) cannot be determined
A
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When there is a recessionary gap, inflation will ________, in response to which the Federal Reserve will ________ real interest rates, and output will ________.
A. decline; lower; decline B. increase; raise; decline C. decline; lower; expand D. decline; raise; decline
The 1890 Sherman Antitrust Act makes it illegal for firms to:
a. raise prices in an attempt to increase profits. b. engage in tacit collusion. c. engage in price discrimination. d. behave together like a monopolist.
Foreign aid:
A. provided by developed countries to developing countries represents about 10 percent of the GDP of developed countries. B. is an important source of funding for investment in most developing countries. C. does not contribute much to domestic investment in most developing countries. D. is largely wasted in most developing countries because it comes with no strings attached.
How can fighting inflation cause a recession?
A. The Federal Reserve raises interest rates to intentionally slow down the economy. B. Businesses lay off workers as a way to keep prices from rising too fast. C. Households stop buying goods and services in response to higher prices. D. The federal government orders businesses to reduce prices, which raises interest rates.