Which of the following is characteristic of a monopoly?
A. The absence of political power
B. Close substitute products
C. The ability to make an economic profit in the long run
D. Operating at peak efficiency
C. The ability to make an economic profit in the long run
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What are the two different types of relationships that variables can have? Explain each. What do these relationships look like when they are graphed?
What will be an ideal response?
If the economy is on the IS curve, but is to the left of the LM curve, aggregate output will ________ and the interest rate will ________
A) rise; rise B) rise; fall C) fall; rise D) fall; fall
If a 200 billion dollar increase in government spending occurs when the Fed seeks to maintain a fixed interest rate then
A) there is no crowding out, the LM curve shifts to offset the shift in the IS curve. B) there is no crowding out, the monetary policy is fixes as is the LM curve fixed. C) crowding out is assured since monetary policy is fixed. D) crowding out is assured since the Fed will accommodate the spending increases.
The difference between normal and inferior goods is that
a. normal goods are of better quality than inferior goods b. an increase in price will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward c. if the price of a normal good increases, individuals who buy it are poorer; for inferior goods, the opposite is true d. an inferior good is something that will not be demanded until quantities of the normal good have been exhausted e. an increase in income will shift the demand curve for a normal good rightward and the demand curve for an inferior good leftward