Increases in Either Interest Rates or Taxes Tend to

question 48

Multiple Choice

Increases in either interest rates or taxes tend to

• A) contract the level of economic activity.
• B) increase the level of business investment.
• C) indicate governmental expansion of the economy.
• D) signal the trough of a recessionary market.

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Definitions:

Pure Monopoly

A market structure where a single seller dominates the market, there are no close substitutes for the product, and barriers to entry are high, preventing competition.

Oligopolistic Industry

An industry characterized by a small number of firms controlling the majority of the market share, leading to limited competition.

International Cartel

An agreement between companies, often from different countries, to control prices, limit production, or divide markets for goods or services internationally, thereby reducing competition.

Noncollusive Oligopoly

A market structure where a few companies dominate but do not illegally agree to control prices or market share.