If interest rates, prices, and output are all rising, then according to the Keynesian model, these changes must be caused by
a. an increase in aggregate supply.
b. a shift to the right of the LM curve.
c. a shift to the right of the LM curve.
d. a shift up in the IS curve.
e. none of the above.
D
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If the firms in a monopolistically competitive industry are suffering short-run losses, which of the following will occur in the long run?
a. Some firms will enter the industry. b. Customers of firms that leave the industry will switch to remaining firms. c. Firms that remain in the industry will face reduced demand. d. Firms will continue to incur losses. e. There will be no excess capacity.
The short-run supply curve of a perfectly competitive industry with firms having identical costs is:
a. a horizontal line at the market price. b. a vertical line at the equilibrium output. c. an upward rising curve. d. a downward sloping step function.
A profit-maximizing competitive firm will hire workers up to the point at which the wage equals the price of the final good
a. True b. False Indicate whether the statement is true or false