Under the conditions of monopolistic competition:
A. prices are always lower in the long run than in the short run.
B. firm profits are always higher in the long run than in the short run.
C. average costs of production are always higher in the short run than in the long run.
D. None of these is correct.
Answer: D
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The theory of new Keynesian inflation dynamics suggests that a fall in aggregate demand would
A) immediately raise real GDP, followed by a more sluggish increase in the price level. B) immediately raise the price level, followed by a more sluggish decline in real GDP. C) immediately reduce real GDP, followed by a more sluggish decline in the price level. D) immediately reduce the price level, followed by a more sluggish decline in real GDP.
By the 1830s, young women and children
(a) were a very important portion of the industrial work force, about 40%. (b) were a minor portion of the industrial work force, about 10%. (c) were a moderate portion of the industrial work force, about 25%. (d) were not a part of the "industrial" work force because legislation forbade it in order to protect young women and children.
Monopolization of both the labor market and the output market results in
A) higher wages than when both are competitive. B) a higher output price than when both are competitive. C) a lower level of output than when both are competitive. D) All of the above.
Which of the following statements is correct?
A) Demand pull inflation is caused by an increase in demand and an increase in supply. B) Cost push inflation is the result of rising input costs pushing the aggregate demand curve to the left. C) Demand pull inflation is caused by an increase in demand and an increase in the quantity supplied. D) None of the above.