The demand curve faced by a monopolistically competitive firms is
A) horizontal.
B) vertical.
C) downward sloping.
D) unitary elastic.
C
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The Great Depression, in which real GDP fell and unemployment rose, can be characterized as a ________
A) inflationary gap B) long-run equilibrium C) recessionary gap D) full-employment equilibrium
Suppose the base year of the CPI is 2010, and the CPI calculated for 2012 was 102. What is the correct interpretation of this number?
A. Average prices in the economy have increased by 102 % since 2010. B. Average prices in the economy have increased by 1.9 % since 2010. C. The cost of living for a typical consumer is 2 % higher than it was in 2010. D. The average goods of all consumers has risen an average of 2 % from 2010 to 2012.
If households fail to recognize that debt-financing represents a future liability (in the form of higher taxes), they will tend to consume
a. less and pass less net wealth on to future generations. b. more and pass more net wealth on to future generations. c. less and pass more net wealth on to future generations. d. more and pass less net wealth on to future generations.
Suppose that Brazil has a comparative advantage in coffee and Mexico has a comparative advantage in tomatoes. Which of the following groups would be worse off if these countries specialize and trade?
A. All groups are better off when specialization and trade take place. B. Brazilian coffee producers. C. Mexican tomato producers. D. Mexican coffee producers.