A contestable market is one in which prices are moderated by the
a. need to build an empire
b. desire to maximize output
c. noncompetitive nature of the market
d. threat of potential entry
e. regulations imposed by government
D
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Refer to the scenario above. Which family pays the highest percentage of its income as tax if income taxes collected by the local government are regressive in nature?
A) The first household B) The second household C) The third household D) The fourth household
In the above figure, the demand for loanable funds curve is drawn for the average expected profit. If the real interest rate is constant at 6 percent and the expected profit falls, the amount of loanable funds demanded will be
A) less than $450 billion. B) $450 billion. C) between $450 billion and $600 billion. D) greater than $600 billion.