When a perfect competitive industry is in long-run equilibrium,
A. each firm earns a normal return.
B. market price is equal to minimum long-run average cost.
C. a firms have no incentive to enter or exit the industry.
D. both a and c
E. all of the above
Answer: E
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International reserves are:
A. foreign currency deposits held by banks to provide international liquidity for domestic customers. B. foreign currency assets held by a government for the purpose of purchasing domestic currency in the foreign exchange market. C. reserves held by banks to back international deposits. D. dollars held by the Federal Reserve to support the value of the dollar.
Describe some of the steps used to combat inflation. What are their side effects?
What will be an ideal response?
If unexpected inflation is good for borrowers, unexpected deflation is good for
A. governments. B. businesses. C. borrowersas well. D. lenders.
Refer to the information provided in Figure 23.6 below to answer the question(s) that follow.
Figure 23.6Refer to Figure 23.6. If aggregate income is $1,000, aggregate consumption is
A. $850. B. $910. C. $920. D. $960.