Suppose that a monopolistically competitive market is in its long-run equilibrium. If the market demand curve shifts to the left due to a recession:
A. the number of firms in the market decreases in the short run.
B. some firms may earn negative profits in the short run.
C. firms' average costs of production decreases as they decrease output levels in the short run.
D. None of these
Answer: B
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The three welfare goals: adequate income, work incentives, and minimize costs are irreconcilable
Indicate whether the statement is true or false
Assume that the central bank increases the reserve requirement. If the nation has low mobility international capital markets and a flexible exchange rate system, what happens to the quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending in the context of the Three-Sector-Model?
a. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). b. The quantity of real loanable funds per time period rises, and net nonreserve-related international borrowing/lending becomes more negative (or less positive). c. The quantity of real loanable funds per time period falls, and net nonreserve-related international borrowing/lending becomes more positive (or less negative). d. The quantity of real loanable funds per time period and net nonreserve-related international borrowing/lending remain the same. e. There is not enough information to determine what happens to these two macroeconomic variables.
In principle, we can
a. ignore positive statements when choosing among various public policy alternatives. b. ignore normative statements when choosing among various public policy alternatives. c. confirm or refute positive statements by examining evidence. d. confirm or refute normative statements by examining evidence.
GDP per capita is a relatively good measurement of:
a. the distribution of income. b. purchasing power. c. household production. d. the standard of living.