Which set best describes the basic features of monopolistic competition?
A. Easy entry, few firms, and standardized products.
B. Easy entry, many firms, and differentiated products.
C. Barriers to entry, few firms, and differentiated products.
D. Barriers to entry, many firms, and standardized products.
Answer: B
You might also like to view...
All else equal, an increase in the rate of inflation ________ aggregate spending and ________ short-run equilibrium output.
A. increases; decreases B. increases; increases C. decreases; decreases D. decreases; increases
Which of the following will not cause the aggregate supply curve to fall?
a. A reduction in a nation's level of productivity. b. A decrease in the nation's average price level (i.e., the implicit price index). c. An increase in input prices. d. A decrease in the value of the domestic currency. e. Natural disasters.
In the mortgage securitization process, "tranching" means:
a. Separating mortgage cash flows into securities of varying risks and returns. b.Pooling risks by combining mortgages with high and low credit ratings. c. Creating a whirlpool of speculative activity by offering easy credit terms to borrowers who do not have the capacity repay their loans. d. Creating new incentives for families to own homes. e. None of the above.
The fact that a bank's assets tend to be long-term while its liabilities are short-term creates:
A. lower risk for the bank, this is why they follow this strategy. B. credit risk. C. trading risk. D. interest-rate risk.