Refer to the diagram for a private closed economy. The marginal propensity to consume is:
A. GF/GB.
B. DA/GB.
C. FE/DE.
D. FB/0B.
C. FE/DE.
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If the Fed purchases securities worth $10 million from a commercial bank, the banking system's balance sheet will show
A) an increase in securities held of $10 million and an increase in bank reserves of $10 million. B) an increase in securities held of $10 million and a decrease in bank reserves of $10 million. C) a decrease in securities held of $10 million and an increase in bank reserves of $10 million. D) a decrease in securities held of $10 million and a decrease in bank reserves of $10 million.
Perfectly competitive markets are characterized by: a. rivalry in product design
b. competition in terms of product quality. c. attempts by sellers to outdo one another with good service. d. none of the above.
In the long run, monopolistically competitive firms can make an economic profit because of product differentiation
Indicate whether the statement is true or false
An oligopolist that cheats on a collusive agreement by reducing price will quickly be forced out of the industry by its competitors
a. True b. False