In a perfectly competitive market, the type of decision a firm has to make is different in the short run than in the long run. Which of the following is an example of a perfectly competitive firm's short-run decision?
A) the profit-maximizing level of output
B) how much to spend on advertising and sales promotion
C) what price to charge buyers for the product
D) whether or not to enter or exit an industry
E) whether or not to change its plant size
A
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In the late 1980s, Canada embarked on an ambitious policy of reducing inflation to zero. Inflation did come down, while the unemployment rate ________, which ________ the U.S. disinflation experience of the 1980s
A) rose, runs counter to B) rose, duplicates C) remained nearly constant, runs counter to D) remained nearly constant, duplicates
Robert Lucas reflects the view of many economists when he argues that the most effective way to reduce world poverty is to:
A. take money from those who are very wealthy and give to those who are very poor. B. provide loans to developing countries. C. increase long-run growth. D. eliminate recessions.
Identify the correct statement about net exports.
What will be an ideal response?
Assuming no effect on exchange rates, which of the following is likely to happen if the money supply in a country contracts?
A. Rise in the real spending B. Fall in the inflow of financial capital C. Rise in the interest rates D. Decline in the international price competitiveness