If there is an increase in the price of oil and the Fed wishes to maintain price stability, what should it do?
a. Do nothing, because the self-correcting mechanism will adjust the economy
b. Sell bonds in the open market
c. Wait, because the price level seldom changes when there is an increase in the price of oil
d. Encourage firms to not adjust the wages they pay
e. Buy bonds in the open market
B
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Refer to Table 14-2. Suppose pricing PlayStations is a repeated game in which Wal-Mart and Target will be selling the game system in competition over a long period of time. In this case, what is the most likely outcome?
A) a noncooperative equilibrium in which each firm charges the high price B) a noncooperative equilibrium in which each firm charges the low price C) a cooperative equilibrium in which each firm charges the low price D) a cooperative equilibrium in which each firm charges the high price
Can a country have comparative advantage in all products?
What will be an ideal response?