Interest Rate Increases Have a ________ Impact on the Residential

question 96

Multiple Choice

Interest rate increases have a ________ impact on the residential home construction industry and a ________ effect on industries that produce consumer necessities such as prescription drugs or basic grocery items.

• A) positive; negligible
• B) negative; positive
• C) negative; negligible
• D) positive; negative

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Definitions:

Collude

When two or more firms work together to set prices, limit supply, or engage in other practices to restrict competition and manipulate market outcomes.

Perfect Competitors

In a perfectly competitive market, firms that have no market power and cannot set prices, with many buyers and sellers trading identical products.

Non-price Competition

A marketing strategy where a company tries to distinguish its product or service from competing products based on attributes other than price.

Herfindahl-Hirschman Index

A measure of market concentration used to determine the competitiveness of a market. It sums the squares of the market shares of all firms in the industry.