A key assumption of most economic analysis is that people are altruistic, meaning that they act in their own self-interest
Indicate whether the statement is true or false
FALSE
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An inflationary gap is created when
A) real GDP is greater than potential GDP. B) real GDP equal to potential GDP. C) the inflation rate is less than potential inflation. D) the price level exceeds the equilibrium price level. E) potential GDP is greater than real GDP.
When economic profits are positive in a perfectly competitive industry,
a. we would expect the market supply curve to shift to the left as a result. b. we would expect the market supply curve to shift to the right as a result. c. we would not expect any change in the market supply curve to result. d. we would expect that the market demand curve to shift right as a result
According to the simple quantity theory of money in the AD-AS framework, when the money supply decreases, the result is __________ in Real GDP and __________ in the price level
A) no change; no change B) a rise; no change C) no change; a rise D) a rise; a fall E) no change; a fall
The large-number-of-sellers condition of perfect competition is met whenÂ
A. there are more sellers than buyers in the market. B. there are more than 50 firms in the industry. C. there are more than 100 firms in the industry. D. each firm is so small relative to the total market that no single firm can influence the market price.