If the average interval between firms' price adjustments is relatively long
A) an increase in aggregate demand will cause a relatively short-lived increase in real GDP.
B) an increase in aggregate demand will cause a relatively long-lived increase in real GDP.
C) a reduction in aggregate demand will cause a relatively short-lived reduction in real GDP.
D) none of the above.
B
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For a monopolistically competitive market, the number of firms in the market implies that
A) each firm faces a perfectly elastic demand. B) all firms will make losses. C) each firm acts independently of other firms. D) firms will collude to set monopoly price and output.
Seymour owns 3 acres of beautiful waterfront property on a large inland lake. In his will, Seymour donates the land to the state with the understanding that the land will be used as a state beach that anyone may use without paying any fees. This state beach
a. will tend to be overused because it is nonexcludable. b. is a common resource when it becomes crowded on sunny summer weekends. c. is rival in consumption when it becomes crowded on sunny summer weekends. d. All of the above are correct.
Adhering to a strict fixed exchange rate system means that
A. no country will experience inflation or recession. B. each nation improves control over its money supply. C. each nation loses some control of its monetary policy and its domestic economy. D. each nation improves control over its fiscal policy and aggregate demand.
What is a surplus? What is a shortage?
What will be an ideal response?