Which of the following best explains why monopolistically competitive firms face a downward sloping demand curve while perfectly competitive firms do not?
A) Monopolistically competitive firms sell a differentiated good.
B) Monopolistically competitive industries have only a few firms.
C) Monopolistically competitive firms have barriers to entry.
D) Only industries with free entry and exit have firms that face horizontal demand curves.
A
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Refer to the figure below. In response to gradually falling inflation, this economy will eventually move from its short-run equilibrium to its long-run equilibrium. Graphically, this would be seen as
A. long-run aggregate supply shifting leftward B. Short-run aggregate supply shifting downward C. Aggregate demand shifting rightward D. Aggregate demand shifting leftward
Regarding central bank independence
A) the Fed is more independent than the European Central Bank. B) the European Central Bank is more independent than the Fed. C) the trend in industrialized nations has been to reduce central bank independence. D) the Bank of England has the longest tradition of independence of any central bank in the world.
It is difficult to exclude individuals from the use of public goods and services
a. True b. False
When the government runs a deficit, the interest rate tends to:
A. fall. B. rise. C. remain unchanged. D. rise or fall, depending on how the deficit is financed.