In the long run, the representative firm in monopolistic competition tends to have:
A. excess capacity.
B. a perfectly elastic demand curve.
C. economic profits.
D. limited product differentiation.
Answer: A
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Which of the following would be expected to increase the demand for money in the U.S.?
A. Financial investors become concerned about increasing riskiness of stocks. B. The economy enters a recession. C. On-line banking allows customers to transfer funds between checking and stock mutual funds 24 hours a day. D. Political instability decreases dramatically in developing nations.
Today the U.S. dollar is worth 1.5 Canadian dollars. Because of changes in economic conditions, people come to believe that by the end of the month the U.S. dollar will be worth 1.2 Canadian dollars. This belief
A) increases the demand for U.S. dollars today. B) decreases the demand for U.S. dollars today. C) decreases the demand for Canadian dollars today. D) decreases the value of exports to Canada.
Political business cycles are economic fluctuations that occur when discretionary policy is manipulated for public interest
Indicate whether the statement is true or false
In direct finance, funds are loaned and borrowed through a financial intermediary
Indicate whether the statement is true or false