At any point on the LM curve
a. there is labor market equilibrium.
b. money supply equals money demand.
c. equilibrium output equals potential output.
d. both commodity and money market are necessary for equilibrium.
e. both b and c.
B
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Refer to Table 14-2. Is the current strategy in which each firm charges the low price and earns a profit of $7,000 a Nash equilibrium? If not, why and what is the Nash equilibrium?
A) No, it is not a Nash equilibrium because each firm can do better by charging the high price. The Nash equilibrium occurs when each firm charges the high price and earns a profit of $10,000. B) No, the current situation is not a Nash equilibrium. The Nash equilibrium for each firm is to have the other charge a high price and for the firm in question charge a low price. C) Yes, the current situation is a Nash equilibrium. D) No, the current situation is not a Nash equilibrium; it is a dominant strategy equilibrium. There is no Nash equilibrium in this game.
The monopolist, unlike the perfectly competitive firm, can continue to earn an economic profit in the long run because of:
a. collusive agreements with competitors. b. price leadership. c. cartels. d. a dominant firm. e. extremely high barriers to entry.
The simple quantity theory of money predicts that changes in
A) the money supply lead to strictly proportional changes in the price level. B) the money supply do not affect the price level. C) the price level lead to strictly proportional changes in velocity and GDP. D) velocity lead to nearly proportional changes in the money supply.
High-growth Asian economies were careful to maintain stable macroeconomic environments
Indicate whether the statement is true or false