The 3 effects that help explain why the aggregate demand curve is downward sloping
What will be an ideal response?
1) foreign trade effect
2) interest rate effect
3) real balances effect
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In the long run, monopolistically competitive firms are ________ to perfectly competitive firms because ________
A) similar; both firms produce at the minimum ATC B) similar; both firms make zero economic profit C) not similar; monopolistically competitive firms set P = MC to maximize profits D) not similar; monopolistically competitive firms can make an economic profit and perfectly competitive firms cannot
A client has $100,000 on deposit at year-end and owes the bank $250,000 on a note payable. The borrowing agreement calls for the client to maintain a minimum (compensating) balance of $40,000 on deposit during the life of the bank loan. On the balance sheet, the asset cash should be stated at $60,000, the excess of the deposit over the compensating balance.
a. true b. false
A demand relationship in which the quantity demanded changes exactly in proportion to the change in price is
A) elastic. B) unit-elastic. C) inelastic. D) consistent with zero elasticity.
Households acquire property through
A. inheritance only. B. savings and inheritance. C. supplying labor in the labor market. D. savings only.