Under the perfectly competitive market structure, the demand curve of an individual firm is
A) perfectly inelastic.
B) downward sloping.
C) relatively inelastic.
D) perfectly elastic.
Answer: D
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The "law of demand" is illustrated by a
A) rightward shift of the demand curve. B) leftward shift of the demand curve. C) movement along the demand curve. D) Both answers A and B are correct.
If investment becomes more interest-sensitive,
A) monetary policy will have a smaller impact on the equilibrium interest rate. B) monetary policy will have a greater impact on equilibrium income. C) fiscal policy will have a smaller impact on equilibrium income. D) fiscal policy will have a larger impact on the equilibrium interest rate.
Supply might ___________________because of a decrease in the cost of inputs.
Fill in the blank(s) with the appropriate word(s).
Falling output, in the short run, could be due to:
A. an increase in short-run aggregate supply. B. a reduction in aggregate demand. C. an increase in long-run aggregate supply. D. an increase in aggregate demand.