In the long run, a perfectly competitive firm earn _______ economic profits
a. positive.
b. negative.
c. zero.
d. positive or negative.
C
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If the reserve ratio is 0.3 and a deposit of $1,000 is made to the bank, the bank can lend out $700
Indicate whether the statement is true or false
Suppose the U.S. economy enters a recession and incomes fall. What will happen to the equilibrium prices and quantities of normal goods? Would your answer be the same if you were discussing inferior goods? Why or why not?
What will be an ideal response?
In the case of public goods, _____
a. the free rider problem does not arise b. one person's consumption of the good reduces the consumption of the good by others c. individuals can be easily excluded from consuming the good once it is provided d. the quantity produced by a private market would be too large from society's viewpoint e. the principle of mutual excludability and principle of rivalry do not apply
If both imports and exports rose, a. AD would decrease
b. AD would increase. c. AD would decrease if exports rose more than imports. d. AD would increase if exports rose more than imports.