All of the following are characteristics of long-run equilibrium for firms in a monopolistically competitive market except:
A) price equals marginal cost.
B) price equals average total cost.
C) marginal cost equals marginal revenue.
D) price exceeds the minimum of average total cost.
A
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Suppose that real GDP grows by 3 percent a year, the quantity of money grows 5 percent a year, and velocity does not change. In the long run, the inflation rate equals
A) 3 percent. B) 5 percent. C) 8 percent. D) 10 percent. E) 2 percent.
Refer to Exhibit 14-1. What sequence of points shows the short- and long-run consequences of a fall in velocity under monetarist assumptions?
a. B-A b. A-E-B c. A-D-B d. B-D-A
If UIP holds, the interest rate is 4%, and the foreign currency is expected to appreciate by 3%, then the foreign interest rate is approximately
a) 1% B) 3% C) 7% D) none of the above
After the Great Depression, until 2008, economic downturns:
A. disappeared. B. became shorter. C. continued more or less as they had prior to the Depression. D. became longer.