Assume the four-firm concentration ratio in industry X is 75 percent and that the firms in the industry produce a differentiated product. Industry X most likely would be characterized as:
A) perfectly competitive.
B) a monopoly.
C) monopolistically competitive.
D) an oligopoly.
D
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To compute a monthly consumer price index, we need
A) data about consumption habits in every month. B) data about item prices every month. C) fixed exchange rates. D) the GDP or GNP deflator.
When the required reserve ratio is changed,
a. the money multiplier is changed but the amount of excess reserves in the banking system is unchanged. b. the money multiplier is unchanged but the amount of excess reserves in the banking system is changed. c. the size of the money multiplier and the amount of excess reserves change in the opposite direction from the required reserve ratio. d. the size of the money multiplier and the amount of excess reserves change in the same direction as the required reserve ratio. e. neither the money multiplier nor the amount of excess reserves change.
Most economists believe that the CPI
a. accurately measures the inflation rate b. accurately measures the inflation rate except during years when there are major economic shocks like the Arab oil embargo c. slightly underestimates the inflation rate d. seriously underestimates the inflation rate e. overstates the inflation rate
A circular-flow diagram is a model that
a. helps to explain how participants in the economy interact with one another.
b. helps to explain how the economy is organized.
c. incorporates all aspects of the real economy.
d. Both (a) and (b) are correct.