In the long run, a monopoly
A. will never exit the industry.
B. will yield an efficient outcome.
C. will always earn zero economic profits.
D. may earn positive economic profits due to entry barriers.
Answer: D
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An automatic stabilizer: a. increases inflationary pressure during expansions
b. Increases the drop in disposable income during recessions and increases the jump in disposable income during expansions. c. reduces the drop in disposable income during recessions and reduces the jump in disposable income during expansions. d. increases tax revenue relative to government spending throughout the business cycle. e. decreases tax revenue relative to government spending throughout the business cycle.
An increase in the demand for a good means that
a. the demand curve has shifted to the left. b. the good's price has fallen and, as a result, consumers are buying more of the good. c. the good has become scarce. d. consumers are willing to purchase more of the good at each possible price.
An increase in government spending with no change in taxes leads to a
A) lower income level B) lower price level C) smaller money supply D) higher interest rate E) higher bond price
Easy monetary policy reduces the real interest rate, which ________ the demand for dollars, ________ the supply of dollars, and ________ the equilibrium value of the dollar.
A. increases; increases; increases B. increases; decreases; increases C. decreases; increases; decreases D. decreases; decreases; decreases