A perfectly competitive market is in equilibrium and then demand decreases. The decrease in demand means the market price will ________ and eventually there will be ________
A) rise; entry by new firms
B) fall; exit by existing firms
C) fall; entry by new firms
D) rise; exit by existing firms
E) fall; neither entry nor exit because the market is perfectly competitive
B
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Which of the following pairs is the best example of substitutes?
a. coffee and cream b. videotapes and VCRs c. honey and biscuits d. bread and butter e. butter and margarine
If real disposable income is $300 billion and real consumer expenditures are $250 billion, it can be assumed that
a. the government is spending the difference. b. the difference is being invested. c. households are saving the difference. d. transfer payments make up the difference.
A currency appreciation reduces aggregate demand and increases aggregate supply
a. True b. False Indicate whether the statement is true or false
Large economies, such as the U.S. economy, should ________ adopt a flexible exchange rate, because giving up the power to stabilize the domestic economy via monetary policy ________.
A. nearly always; comes with a high cost B. nearly always; is of little consequence C. almost never; is of little consequence D. almost never; comes with a high cost