The resource market is important from a macroeconomic perspective because
a. it coordinates the allocation of productive resources and determines the costs of production.
b. it determines the interest rates faced by borrowers and lenders.
c. inflation rates are set in the resource market by the government.
d. resource prices determine the position of the long-run aggregate supply curve.
A
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If all firms in a perfectly competitive industry are experiencing economic losses, then:
A. some firms will exit the industry, until accounting profits equal zero. B. some firms will exit the industry, until economic profits equal zero. C. some firms will exit the industry, until economic profits are positive. D. all existing firms will stay in the industry, hoping for better times.
Using the ISLM model, show graphically and explain the effects of a monetary contraction. What is the effect on the equilibrium interest rate and level of output?
What will be an ideal response?
Cross-price elasticity of demand is
A. negative for substitute goods. B. positive for general goods. C. negative for complementary goods. D. unitary for secondary goods.
If the supply curve for housing has the usual positive slope, rent controls are likely to
A. increase the quantity of housing. B. improve the quality of housing. C. aggravate the housing shortage. D. help low-income families find suitable housing. E. increase the demand for housing.