In the long run when a perfectly competitive firm experiences negative economic profits
A. the high barriers to entry prevent further competition.
B. that firm exits the industry.
C. new firms enter the industry.
D. firms have no incentive to exit or enter the industry.
Answer: B
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When ________ in a market, the total net benefit to society is maximized
A) deadweight loss is maximized B) consumer surplus is minimized C) producer surplus is minimized D) a competitive equilibrium is achieved
The money supply in an economy increases when, other things equal, _____
a. the government surplus rises b. the amount of government borrowing rises c. tax revenues increase d. government spending increases e. the government deficit falls
Which of the following is correct? When actual leakages exceed actual injections, then:
a. Inventories rise, unemployment tends to rise, and prices tend to fall. b. Inventories rise, unemployment tends to fall, and prices tend to rise. c. Inventories fall, unemployment tends to rise, and prices tend to rise. d. It is impossible for these two to be unequal. e. The nation falls into an economic recession.
Rising interest rates can cause crowding out, but they are also the result of crowding out.
Answer the following statement true (T) or false (F)