Concentration ratios:
A. may overstate the degree of competition because they ignore imported products.
B. may overstate the degree of competition because interindustry competition is ignored.
C. may understate the degree of competition because they ignore imported products.
D. provide detailed insights as to the price and output behavior of firms that comprise the
various industries.
Answer: C
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If an increase in autonomous consumption spending of $25 million results in a $100 million increase in equilibrium real GDP, then
A) the MPC is 0.25. B) the MPC is 0.75. C) the MPC is 0.8. D) the MPC is 2.5.
In a move to increase its openness, the Fed has consistently increased the amount of information available to the public. According to the new classical model, the Phillips curve the Fed faces should become more:
a. horizontal. b. very steep. c. vertical. d. unstable.