Moving upward along an LM curve, velocity ________ because ________ remains constant while ________ rises
A) rises, real balances, real income
B) rises, the interest rate, the price level
C) rises, the interest rate, real balances
D) falls, real balances, real income
E) falls, real income, real balances
A
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If firms in a monopolistically competitive market are earning negative economic profits, it is likely that:
A. firms will enter the market. B. the firms in the market will expand to try to capture lower costs per unit. C. firms will exit the market. D. the firms in the market will shut down immediately.
A decrease in marginal tax rates will cause entrepreneurship to ________ and AS to shift to the ________.
A. decrease; right B. increase; left C. decrease; left D. increase; right
A trough in the business cycle:
a. The natural rate of unemployment is at a minimum point b. Structural and frictional unemployment are at their highest levels c. Employment and output reach their lowest levels d. Cyclical unemployment is at a minimum point
Both the marginal cost and the average variable cost curves are U-shaped. At the minimum point on the average variable cost curve, the marginal cost must be:
A. greater than the average variable cost. B. less than the average variable cost. C. equal to the average variable cost. D. at its minimum.