When free entry is one of the attributes of a market structure, economic profits are:
a. generally driven to zero in long-run equilibrium.
b. generally negative for all firms
c. generally zero in the short run.
d. always positive.
a
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When the government increases the level of official reserves by $50 million, the change is recorded in the
A) capital and financial account. B) current account. C) official settlements account. D) official reserves account. E) foreign currency account.
Potential GDP focuses on the:
A) long-run supply side of the economy. B) long-run demand side of the economy. C) short-run supply side of the economy. D) short-run demand side of the economy.
Over the past year price inflation has been 10%, but the price of a used Ford Escort has fallen from $6,000 to $5,000. The real price of a Ford Escort has fallen by:
A) 12%. B) 17% C) 20%. D) 24% E) 32%.
If the economy in the graph shown is currently at point B, and the government increases its spending, the likely outcome will be that the:
A. economy will experience deflation. B. economy's unemployment rate will increase. C. economy will increase its level of output. D. All of these are likely to be true.