In monopolistically competitive markets, economic losses
a. suggest that some existing firms will exit the market.
b. suggest that new firms will enter the market.
c. are minimized through government-imposed barriers to entry.
d. are never possible.
a
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Changes in the federal funds rate:
A) change the long-run expected interest rates in the same direction. B) change the long-run expected interest rates in the opposite direction. C) can change the long-run expected interest rate either in any direction depending on the magnitude of the change in the federal funds rate. D) have no effect on the long-run expected interest rate.
Under which one of the following situations would you be better off?
A) You have $10,000 in your savings account paying 5 percent per year and unanticipated inflation is 8 percent per year. B) You have paid $500 for a $1,000 U.S. savings bond that matures in 10 years and unanticipated inflation is 10 percent per year. C) You lend a friend $1,000 at 6 percent to be repaid in one year and unanticipated inflation is 7 percent during the year. D) You borrowed $2,500 at 7 percent to pay for this year's college expenses and unanticipated inflation is 12 percent during the year.
If the average price level in 1991 was 1.20 relative to the base year in 1986, then a dollar in 1991 bought 20 percent more goods and services than a dollar in 1986
a. True b. False Indicate whether the statement is true or false
Assume a closed economy. If consumption spending is $6.2 trillion, investment spending is $2.5 trillion, net taxes are $1.5 trillion and total income is $11 trillion, how much must government purchases be?
a. $2.3 trillion b. $0.8 trillion c. $3.3 trillion d. $7 trillion e. cannot be determined without more information