Refer to the diagrams. With the industry structures represented by diagram:
A. (A) there will be only a normal profit in the long run, while in (B) an economic profit can persist.
B. (A) price exceeds marginal cost, resulting in allocative inefficiency.
C. (B) price equals marginal cost, resulting in allocative efficiency.
D. (B) equilibrium price and quantity will be e and h, respectively.
A. (A) there will be only a normal profit in the long run, while in (B) an economic profit can persist.
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Which of the following is likely to happen if the reserves held at the Fed by the private banks decrease?
A) Banks will make more loans. B) The M2 measure of money will decrease. C) The nominal interest rate will decrease. D) Labor demand will increase.
In Figure 4-9 above, suppose LMA shifts to LMB. The distance from points A to L tells us
A) the change in income given zero interest responsiveness of Ap. B) the change in income resulting from the interest rate falling to its value at point B?. C) how much the money supply increased in producing the LM shift. D) the change in income that by itself raises the demand for money by as much as the money supply rose.
Inflation is an increase in:
a. prices of all products in the economy. b. homes, autos and basic resources. c. the general price level of products. d. none of these.
Critics of advertising make which of the following claims about advertising? i. It often creates "needs" for trivial products. ii. It manipulates people's tastes. iii. It uses scarce resources and raises costs
a. (i) and (ii) only b. (i) only c. (ii) only d. (i), (ii), and (iii)