In monopolistically competitive industries, firms find it easy to enter and exit the market in the long run.
Answer the following statement true (T) or false (F)
True
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An economy with an expansionary gap will, in the absence of stabilization policy, eventually experience a(n) ________ in the inflation rate, leading to a(n) ________ in output.
A. decrease; increase B. increase; increase C. decrease; decrease D. increase; decrease
Refer to Table 9.4. In which market do buyers underestimate the chance of getting a lemon?
A. 1 and 2 only B. 1 and 3 only C. 2 and 3 only D. None of these
A good that people must actually consume before they can determine qualities is called
A. a search good. B. a credence good. C. a persuasive good. D. an experience good.
Suppose your bank pays you 5 percent interest per year on your savings account. If prices increase by 5 percent per year over that time, approximately how much real value do you gain by keeping $100 in the bank for a year?
A. $0 B. $1 C. $3 D. $6