A firm in a monopolistically competitive market is similar to a monopoly in the sense that (i) they both face downward-sloping demand curves. (ii) they both charge a price that exceeds marginal cost. (iii) free entry and exit determines the long-run equilibrium
a. (i) only
b. (ii) only
c. (i) and (ii) only
d. (i), (ii), and (iii) only
c
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The leakage and injections approach implies that deficit spending by the government must be financed by
A) private investment less private savings plus net exports. B) private saving less private investment plus net exports. C) the trade deficit must always offset the government deficit. D) B and C.
List the characteristics of a monopolistically competitive market
What will be an ideal response?
The consumption function shows the relationship between consumer expenditures and:
a. the interest rate. b. the tax rate. c. savings. d. disposable income.
A country with a relatively low level of real GDP per person is considering adopting two policies to promote economic growth. The first is to decrease barriers to trade. The second is to restrict foreign portfolio investment. Which of these policies do most economists say promote growth?
a. both the first and the second b. the first but not the second c. the second but not the first d. neither the first nor the second