Monopolistic competition is characterized by:
a. a small number of firms selling differentiated products.
b. a large number of firms selling identical products.
c. high barriers to entry.
d. a large number of firms selling differentiated products.
Question 2
Under a fixed exchange-rate system, in order to maintain the exchange rate:
a. governments must adopt a laissez-faire economic policy.
b. all trading partners must enjoy the same level of economic growth.
c. currencies must be inconvertible.
d. the imports of one country must equal the exports of its trading partner.
e. governments must intervene in the foreign exchange market.
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