In: Economics
Which of the following is the most liquid asset?
A. |
certificate of deposit |
|
B. |
checking account |
|
C. |
stocks |
|
D. |
bonds |
1 points
QUESTION 13
When oligopolistic firms in an industry come together to form a cartel, then it is most likely that
A. |
industry output will decrease while prices will increase. |
|
B. |
industry output will increase while prices will decrease. |
|
C. |
both industry output and prices will decrease. |
|
D. |
both industry output and prices will increase. |
The liquidity of an asset is denoted by how quickly it can be transfered to cash money. Money is the most liquid form of an asset.
Given the options :
Therefore the correct option is : B
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In oligopoly firms in the industry compete with each other to set quantity and total market quantity decide the price. The oligopoly price is less than monopoly price. If the oligopoly form a cartel, the market becomes monopolistic. The price in the monopolist market is higher than oligopoly and as price rises quantity falls atthenew equilibrium.
Given the options:
Therefore the correct option is : A