Three manufacturing firms want to maintain their oligopolistic market power by tacitly colluding with each other. Which action helps them achieve this goal?
a. They create a cartel and sign a formal collusion agreement.
b. They develop an implied price leadership understanding.
c. They ease the barriers to entry in their industry.
d. They hold formal meetings to discuss pricing strategies.
b. They develop an implied price leadership understanding.
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In domestic economies, inflation bias often exists, which reduces the power of the central bank to use monetary policy to stimulate economic activity. If an anti-inflation nation such as Germany enters into a monetary union with such nations, what remedy is there for this problem?
A) Germany would have to conform with an activist monetary policy that gave preference to economic performance. B) Germany could insist on the central bank being insulated from politics and democratic control. C) Germany could insist that all central bank policies be reviewed by the Parliament. D) Germany would allow nations into the monetary union, even with their inflation bias, because that would disappear quickly on joining the Eurozone.
In 18th century Europe, governments gave guilds legal authority to limit production of goods
This authority obstructed the market mechanism because the guild's actions prevented the forces of ________ from coordinating the self-interested decisions of producers and consumers. A) demand and supply B) nature C) opportunity cost D) absolute advantage