Which market model assumes the least number of firms in an industry?
A. Monopolistic competition
B. Pure competition
C. Pure monopoly
D. Oligopoly
C. Pure monopoly
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Taxes distort economic behavior because they
A) change the composition of income and spending. B) cause deviations in economic behavior from the efficient, free-market outcome. C) change the balance between private and public expenditures. D) change the composition of consumption, investment, government spending, and net exports.
A supply shock, such as the OPEC oil-price increases in the 1970s,
A) can lead to accelerating inflation, if an accommodation policy tries to maintain the pre-shock level of real GDP. B) will cause lower real wages in long-run equilibrium. C) will reduce the natural level of real GDP. D) both B and C
According to the Phillips curve, policymakers can reduce inflation by
a. contracting aggregate demand. This contraction results in a temporarily higher unemployment rate. b. contracting aggregate demand. This contraction results in a temporarily lower unemployment rate. c. expanding aggregate demand. This expansion results in a temporarily lower unemployment rate. d. expanding aggregate demand. This expansion results in a temporarily higher unemployment rate.
The demand for a factor of production depends on the:
A. supply of the factor. B. supply of other factors of production. C. demand for other factors of production. D. demand for the products that it helps to produce.