The entry of new firms into an industry will very likely
A. shift the industry supply curve to the right.
B. cause the market price to fall.
C. reduce the profits of existing firms in the industry.
D. All of the responses are correct.
Answer: D
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Would each of the following groups be happy or unhappy if the Mexican peso appreciates against the U.S. dollar? Answer the question for each of the following:
(a) The U.S. pension funds holding Mexican government bonds (b) U.S. tourists planning a trip to Mexico (c) Mexican exporting manufacturers (d) A Mexican firm trying to buy properties overseas
In the basic closed-economy ISLM model, the goods market can be described by the
A) consumption function. B) investment function. C) government spending and tax. D) goods market equilibrium condition. E) all of the above.
Which of the following statements is false?
A. Inflation that is higher than expected benefits debtors, and inflation that is lower than expected benefits creditors. B. When unanticipated inflation occurs regularly, the degree of risk associated with investments in the economy increases. C. Whether you gain or lose during a period of inflation depends on whether your income rises faster or slower than the prices of the things you buy. D. There are no costs or losses associated with anticipated inflation.
When the dollar value of a country's imports of final products exceeds the dollar value of its exports, the country has a
A. balance of trade deficit. B. balance of payments surplus. C. balance of trade surplus. D. balance of payments deficit.