Question 2 (3 points) After participating members of a cartel form an agreement

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Question 2 (3 points)

After participating members of a cartel form an agreement on common prices and output quotas, then an individual firm can increase its own profits by

Question 2 options:

decreasing production.

paying its employees higher wages.

decreasing prices.

advertising.

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Question 3 (3 points)

A cartel is

Question 3 options:

a group of consumers that bid against each other for the same product.

a government agency that regulates markets.

a group of producers that agree to set common prices and output quotas.

an arbitrator to settle disputes between consumers and producers.

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Question 4 (3 points)

Under flexible exchange rates, the exchange rate is set by

Question 4 options:

the intersection of demand and supply curves in the currency markets.

the U.S. Federal Reserve's Board of Governors.

negotiations among central banks of the major industrial powers.

the International Monetary Fund.

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Question 5 (3 points)

The demand for dollars will increase when

Question 5 options:

real interest rates in the United States fall.

U.S. labor productivity increases relative to the world.

U.S. residents develop a taste for more imported products.

the world is perceived as more stable than it used to be.

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Question 6 (3 points)

The market in which households, firms and governments buy and sell national currencies is known as

Question 6 options:

standard drawing rights.

the foreign exchange market.

flexible exchange rates.

the exchange rate.

decreasing production.

paying its employees higher wages.

decreasing prices.

advertising.

Explanation / Answer

Quesiton 2)

Sinc e price and output quotas are decided through the agreements. So firm can not change the price. Thus now firm is left with advertisement.

Thus correct option is Advertising

Questions 3)

Catel is Group of producers that agree to set common prices and output quotas

Questions 4)

Under the flexible exchange rates, the exchange rate is set by

Intersection of demand and supply curves in the currency market

Questions 5)

Demand for dollar increases When US residents develop a taste for more imported products

Questions 6)

Foreign Exchange market

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