Which of the following is a transfer payment?
A. the president's salary
B. veterans' benefits
C. the NASA budget
D. schoolteachers' salaries
B. veterans' benefits
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A commercial bank has no excess reserves until a depositor places $5,000 in cash at the bank. The commercial bank then lends $4,000 to a borrower. As a consequence of these transactions, the size of the money supply has
A. increased by $5,000. B. increased by $4,000. C. not been affected. D. decreased by $5,000.
Game theory is based on the idea that
a. government determines the rules of the game b. firms are strategically independent c. firms are price takers d. a player's strategy must take account of the strategies followed by other players e. a player's strategy must be independent of the strategies followed by other players
When a government reduces its budget deficit, then that country's
a. supply of loanable funds shifts right. b. supply of loanable funds shifts left. c. demand for loanable funds shifts right. d. demand for loanable funds shifts left.
Answer the following statements true (T) or false (F)
1. When firms in a purely competitive industry are earning profits that are greater than normal, the supply of the product will tend to decrease in the long run. 2. When new firms enter a purely competitive industry, the market supply curve will shift to the left. 3. When some firms leave a purely competitive industry, the market supply curve will shift in such a way that the remaining firms' profits will increase. 4. In the long run, pure competition forces firms to produce at the minimum possible average total cost and the firms will charge a product price equal to that cost. 5. A purely competitive firm that is earning positive profits in its short-run equilibrium situation will continue to earn positive profits at the long-run equilibrium.