macro final

The demand curve for an individual seller's product in perfect competition is A) horizontal. C) the same as market demand. B) downward sloping. D) vertical.

A

A major difference between monopolistic competition and perfect competition is A) the number of sellers in the markets. B) that products are not standardized in monopolistic competition unlike in perfect competition. C) the barriers to entry in the two markets. D) the degree by which the market demand curves slope downwards.

b

During what period of time did the United States most consistently adhere to the gold standard? A) from 1944 until 1980 B) from the nineteenth century until the 1930s C) from 1914 until 1929 D) from the eighteenth century until the nineteenth century

b

If a country's currency is determined only by the demand and supply for that country's currency, the country is said to have a A) gold standard. B) floating exchange rate. C) fixed exchange rate. D) managed float.

b

If net exports are positive A) capital inflows must be greater than capital outflows. B) net foreign investment is also positive. C) net foreign investment is negative. D) Both A and B are correct.

b

Oligopolies exist and do not attract new rivals because A) there can be no product differentiation. B) of barriers to entry. C) of competition. D) the firms keep profits and prices so low that no rivals are attracted.

b

One reason why the "fast-casual" restaurant market is competitive is that A) consumption takes place in public. B) barriers to entry are low. C) demand for "fast -casual" food is very high. D) it is trendy and therefore is likely to have a customer following.

b

Refer to Figure 12-2. What is the amount of profit if the firm produces Q 2 units? A) It is equal to the vertical distance g to Q 2. B) It is equal to the vertical distance c to g. C) It is equal to the vertical distance c to g multiplied by Q 2 units . D) It is equal to the vertical distance c to Q 2.

b

The balance of payments includes which three accounts? A) the capital flows account, the financial account, and the trade account B) the current account, the financial account, and the capital account C) the net investment account, the net exports account, and the net transfers account D) the balance of trade account, the net foreign investment account, and statistical discrepancy

b

The current exchange rate system has which of the following characteristics? A) All developing countries allow their currencies to float against the dollar and other major currencies. B) The United States allows the dollar to float against other major currencies. C) The current global foreign exchange system is a fixed system. D) Several developing countries in Asia have adopted the Bretton Woods system. E) The countries of the European Union have adopted the gold standard.

b

The current exchange rate system in the United States is best described as a A) silver standard. B) managed float exchange rate system. C) gold standard. D) fixed exchange rate system.

b

The gold standard is an example of A) a managed float exchange rate system. B) a fixed exchange rate system. C) a flexible exchange rate system. D) the Bretton Woods System. E) a floating exchange rate system.

b

A monopolist faces A) a perfectly elastic demand curve. C) a downward-sloping demand curve. B) a perfectly inelastic demand curve. D) a horizontal demand curve.

c

The study of how people make decisions in situations where attaining their goals depends on 15) their interactions with others is called A) the prisoner's dilemma. B) dominant strategy equilibrium. C) game theory. D) Nash equilibrium.

c

Under which exchange rate system was a dollar redeemable for gold only if the dollar was presented by a foreign central bank? A) a managed float exchange rate system B) a fiat system C) the Bretton Woods System D) the gold standard

c

Which of the following is a characteristic of an oligopolistic market structure? A) Each firm sells a unique product. B) Each firm need not react to the actions of rivals. C) There are few dominant sellers. D) It is easy for new firms to enter the industry.

c

Which of the following is most important in explaining exchange rate fluctuations in the short run? A) relative price levels across countries B) relative rates of productivity growth across countries C) interest rates D) preferences for domestic and foreign goods

c

Which of the following is not a characteristic of a monopolistically competitive market structure? A) There are low barriers to entry of new firms. B) All sellers sell products that are differentiated. C) Each firm must react to actions of other firms. D) There is a large number of independently acting small sellers.

c

Consider the following characteristics: a. a market structure with barriers to entry b. demand curves that are easily identified c. firm cannot make zero profits in the long run d. firm can reap long-run profits. Which of the characteristics in the list above is shared by an oligopolist and a monopolist? A) a,b,c,andd B) a,b, and d C) a,c,andd D) aandd

d

If net exports are equal to net foreign investment, which of the following is not true? A) The balance of payments is zero. B) Net capital inflows are equal to imports minus exports. C) The current account balance is equal to the negative of the financial account balance. D) The balance on the financial account is zero.

d

A four-firm concentration ratio measures A) the fraction of an industry's sales accounted for by the four largest firms. B) how the four largest firms became so concentrated. C) the production of any four firms in an industry. D) the fraction of employment of the four largest firms in an industry.

a

A monopolist's profit-maximizing price and output correspond to the point on a graph A) where marginal revenue equals marginal cost and charging the price on the market demand curve for that output. B) where price is as high as possible. C) where average total cost is minimized. D) where total costs are the smallest relative to price.

a

Firms in perfect competition are price takers because A) each firm is too small relative to the market to be able to influence the price. B) consumers have enough market power to set prices. C) firms accept the price determined by the government. D) one firm determines the price that all other firms in the industry will charge.

a

The key characteristics of a monopolistically competitive market structure include A) many small (relative to the total market) sellers acting independently. B) barriers to entry are strong. C) sellers have no incentive to advertise their products. D) all sellers sell a homogeneous product.

a

A monopoly differs from monopolistic competition in that A) a monopoly faces a perfectly inelastic demand curve while a monopolistic competitor faces an elastic demand curve. B) a monopoly has market power while a firm in monopolistic competition does not have any market power. C) in a monopoly there are significant entry barriers, but there are low barriers to entry in a monopolistically competitive market structure. D) a monopoly can never make a loss, but a firm in monopolistic competition can.

c

A monopoly is the only seller of a product A) with a perfectly inelastic demand. B) with many substitutes C) without a close substitute. D) without a well-defined demand curve.

c

According to the short-run Phillips curve, the unemployment rate and the inflation rate are A) positively related. B) unrelated. C) negatively related. D) unaffected by monetary policy.

c

An economy that has interactions in trade or finance with other economies is referred to as A) a trade -balanced economy. C) an open economy. B) a net foreign investment economy. D) a closed economy.

c

An open economy is an economy that has A) governmental regulations regarding the number of hours retail establishments must remain open on a daily basis. B) governmental regulations regarding public information that is included in corporate finance reports. C) interactions in trade or finance with other economies. D) its own stock market.

c

If the United States has a net export surplus, which of the following must be true ? A) Domestic public saving must be greater than net foreign investment. B) The balance on the financial account must equal the balance on the current account. C) Net foreign investment must be positive as well. D) Domestic private saving must be greater than net foreign investment.

c

If the market price is $25 in a perfectly competitive market, the marginal revenue from selling the fifth unit is A) $5. B) $12.50. C) $25. D) $125.

c

If, for the last unit of a good produced by a perfectly competitive firm, MR > MC, then in producing it, the firm A) is maximizing marginal profit. B) added more to total costs than it added to total revenue. C) added more to total revenue than it added to total cost. D) has minimized its losses.

c

Purchasing power parity is the theory that, in the long run, exchange rates should be at a level such that equivalent amounts of any country's currency A) will equalize nominal interest rates across countries. B) should earn the same real rate of return. C) allow one to buy the same amount of goods and services. D) are valued inversely relative to the size of its GDP.

c

The United States abandoned the Bretton Woods system of exchange rates in A) the 1920s. B) the 1940s. C) the 1970s. D) the 1990s.

c

The currency adopted by most countries in Western Europe is referred to as the A) Eurodollar. B) pound. C) euro. D) yen.

c

The curve showing the short-run relationship between the unemployment rate and the inflation rate is called A) the Sargent curve. B) the unemployment curve. C) the Phillips curve. D) the monetary policy curve.

c

The "Discount Department Stores" industry is highly concentrated. What does this mean? A) There is cut-throat competition in this industry because there are no entry barriers. B) There are many large stores such as Walmart, Target, Kohl's, in this industry. C) The sales volume in this industry is consistently high. D) A few large stores account for a significant portion of industry sales.

d

The current account does not include which of the following? A) net investment income B) net exports C) net transfers D) U.S. holdings of foreign assets

d

The demand curve for each seller's product in perfect competition is horizontal at the market price because A) all the demanders get together and set the price. B) all the sellers get together and set the price. C) the price is set by the government. D) each seller is too small to affect the market price.

d

When the value of a currency is determined mostly by demand and supply, but with occasional government intervention, the exchange rate system is defined as A) floating. B) Bretton Woods. C) fixed. D) managed float.

d