Assume an industry is comprised of three firms—A, B, and C. Firm A controls 50 percent of the market, Firm B controls 30 percent, and Firm C controls 20 percent. What is the value of the Herfindahl Index?
a. 100
b. 200
c. 2,600
d. 3,800
d. 3,800
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Suppose the four-firm concentration ratio for an industry is 10 percent. This value indicates ________. If the four-firm concentration ratio for another industry is 95 percent, this value indicates ________
A) the industry is competitive; the industry has very little competition B) the industry has very little competition; the industry is very competitive C) the industry has firms worldwide; the industry is concentrated in one country D) the HHI will be high; the HHI will be low
The intuition behind the slope of the LM curve is that
a. as the interest rate increases, the money supply increases and income increases. b. as the interest rate increases, investment and income decreases. c. as income increases, money demand increases which increases interest rates. d. as income increases, money demand decreases which decreases interest rates. e. none of the above.
The current international monetary system is
a. a flexible exchange rate system b. a fixed exchange rate system c. a system combining fixed and flexible exchange rates d. a gold standard e. a gold exchange rate system
Which of the following is true of a recessionary gap? a. It develops when the expected price level is less than the actual price level
b. In the long run, this gap closes when resource suppliers negotiate lower resource payments. c. It measures the amount by which actual output is greater than the economy's potential output. d. In the long run, this gap closes when the short-run aggregate supply curve shifts rightward. e. In the long run, this gap closes when the aggregate demand curve shifts rightward.