How does a cartel differ from an oligopolistic industry?
A. Oligopolistic industries cannot make economic profit.
B. Cartels reduce uncertainty to maximize profits.
C. Cartels are legal while oligopolies are illegal.
D. Oligopolies face large amounts of competition while cartels do not.
Answer: B
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Suppose a recession occurs as a result of a negative supply shock, and instead of the economy naturally working its way back to equilibrium, the government uses policy to shift the aggregate demand curve to fight the recession. Using policy this way would
A) bring real GDP back to potential GDP more quickly but would result in a permanently higher price level. B) bring real GDP back to potential GDP more slowly but would bring the price level back to the original price level more quickly. C) quickly result in a new, higher level of real GDP and a permanently lower price level. D) bring the price level back to its original level more quickly but would result in a permanently lower level of potential GDP.
Following three years of negative growth, restaurant sales in the United States were expected to increase 3.6 percent in 2011. If the increase in restaurant sales increases aggregate expenditure,
What will be an ideal response?