For a firm in a perfectly competitive industry,
A) both short-run and long-run economic profits may be negative.
B) short-run economic profits must be zero.
C) short-run economic profits may be positive, but long-run economic profits must be zero.
D) short-run and long-run economic profits must be zero.
C) short-run economic profits may be positive, but long-run economic profits must be zero. (A firm in a perfectly competitive market may generate a profit in the short-run, but in the long run, it will have economic profits of zero.)
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________ will increase current consumption, saving, and future consumption
A) an increase in future income B) an increase in initial wealth C) an increase in current income D) a decrease in the real interest rate
In the short-run macro model, a decrease in the money supply will
a. lower the interest rate, increase spending, and increase GDP b. lower the interest rate, reduce spending, and lower GDP c. raise the interest rate, increase spending, and increase GDP d. raise the interest rate, reduce spending, and lower GDP e. raise the interest rate, reduce spending, and increase GDP
Within the AD/AS model, if an unanticipated reduction in aggregate demand results in less than the full-employment rate of output,
a. the natural rate of unemployment will increase. b. long-run aggregate supply will increase. c. lower resource prices and declining interest rates will direct the economy back to full employment. d. higher resource prices and rising interest rates will direct the economy back to full employment.
How do rational behavior and self-interest relate?
a. Self-interest rarely motivates people to use rational behavior to make decisions. b. Self-interest is rational when it is selfless, but not selfish. c. Self-interest usually motivates people to use rational behavior to make decisions. d. Self-interest is rational when it is selfish, but not when it is selfless.