All of the following statements are consistent with the kinked demand curve theory except
A. the theory depicts cutthroat competition.
B. according to the theory, firms are reluctant to raise or lower price.
C. according to the theory, if a firm raised its prices its competitors also would raise their prices.
D. the theory is associated with "sticky prices."
C. according to the theory, if a firm raised its prices its competitors also would raise their prices.
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Explain the traditional interest-rate channel for expansionary monetary policy. Explain how a tight monetary policy affects the economy through this channel
What will be an ideal response?
In which of the following ways does government affect the consumption component of planned aggregate expenditures?
a. Through net taxes, which change disposable income b. By purchasing goods and services, which increase consumption c. By using subsidies to encourage firms to invest d. By reducing the interest rate to encourage firms to invest e. By producing public goods
Which of the following is not a result of rent controls?
a. reduced incentives to build new rental housing b. reduced incentives for landlords to keep rental units in good repair c. increased discrimination against people deemed undesirable on the part of landlords d. increased turnover as tenants move more frequently from one rental unit to another
Signaling is an action taken by an uninformed party to induce an informed party to reveal information
a. True b. False Indicate whether the statement is true or false