At long-run equilibrium in monopolistic competition, there is
A. neither allocative nor productive efficiency.
B. both allocative and productive efficiency.
C. allocative efficiency.
D. productive efficiency.
Answer: A
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The amount of a good sold in a market at a particular price cannot exceed the quantity
A. demanded at that price. B. supplied at that price. C. sold when there is a price floor. D. sold when there is a price ceiling.
Which of the following central bank policies will lower the money supply?
a. Lowering the reserve ratio. b. Lowering the discount rate. c. Selling foreign currency in the foreign exchange market. d. Buying government securities. e. All of the above.
Physical capital is distinguished from human capital because
A. human capital refers only to day laborers. B. physical capital refers to trained people. C. physical capital refers to equipment and machinery, whereas human capital refers to trained people. D. physical capital refers to trained people, whereas human capital refers to equipment and machinery.
For this question, assume that the economy is initially operating at the natural level of output. An increase in the price of oil will cause which of the following in the medium run?
A) a reduction in the interest rate B) a reduction in output and an increase in the aggregate price level C) a reduction in output and a reduction in the interest rate D) a reduction in unemployment, an increase in the nominal wage and an increase in the aggregate price level E) a reduction in the aggregate price level and no change in output