Which of the barriers to entry can last indefinitely and which are more likely to eventually erode such that a new entry can take place?
What will be an ideal response?
Barriers such as economies of scale and government restrictions can last indefinitely since the first depends on technology and the latter on government action. It is unlikely that a firm can maintain control of a key input indefinitely, and patents expire after 20 years. Government regulations and tariffs can last indefinitely, although a change of government could knock these down as well.
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Which of the following tools of monetary policy is used least often?
A) setting the required reserve ratio B) setting the discount rate C) open market operations D) acting as a lender of last resort
In recent years, the fertility rate in developing countries has been
(a) declining. (b) holding steady. (c) increasing. (d) showing no particular pattern.