The Herfindahl-Hirschman Index Is a Measure of Concentration Found By

question 55

Multiple Choice

The Herfindahl-Hirschman index is a measure of concentration found by:

• A)squaring the percentage market share of each firm in the industry.
• B)squaring the percentage market share of each firm in the industry and then summing the squared market shares.
• C)summing the percentage market shares of each firm in the industry.
• D)squaring the sums of the concentration ratios found in an industry survey of the largest four and largest eight firms.

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Definitions:

Nominal Exchange Rate

The rate at which one country's currency can be exchanged for another's, not adjusted for inflation differences between the two countries.

Real Exchange Rate

The price of a country's goods and services in comparison to those of another country, adjusted for exchange rate changes.

Real Exchange Rate

The rate at which the currency of one country can be exchanged for that of another, adjusted for inflation, which determines the purchasing power of one currency relative to another.

Nominal Exchange Rate

The rate at which one currency can be exchanged for another currency, not adjusted for inflation.