If price changes by one firm induce rival firms selling close substitutes to alter their prices,
A) firms will be able to raise their prices without fear of losing sales.
B) the demand curve will shift in response to a change in price.
C) the original firm faces an elastic demand curve.
D) the original firm faces an inelastic demand curve.
E) there is no competition between the rival firms.
B
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A recessionary gap is the amount by which
A) the short-run equilibrium level nominal GDP is above the short-run real GDP. B) the short-run equilibrium level nominal GDP is below the short-run real GDP. C) total planned real expenditures exceed total planned production in the long run. D) the short-run equilibrium level of real GDP is below the full-employment level of real GDP.
An open market purchase of securities by the Fed
A) increases banks' reserves and decreases banks' securities.
B) decreases banks' reserves and increases banks' securities.
C) decreases banks' total assets.
D) involves a bank purchasing government securities from the Fed.
A) Given the information above, if full employment GDP were 2,300, would there be an inflationary gap or a recessionary gap? B) What two fiscal policy measures would you recommend to remove that gap?
In which of the following market structures can you find differentiated products?
A. monopoly B. perfect competition C. oligopoly D. monopolistic competition and oligopoly