For a perfectly competitive industry, a decline in technology will cause
A. the industry short-run supply curve to shift to the right.
B. a movement up the short-run industry supply curve.
C. a movement down the short-run industry supply curve.
D. the industry short-run supply curve to shift to the left.
Answer: D
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Bank capital is
A) the current market value of the bank's physical assets. B) the historical or original value of the bank's physical assets. C) the capital contributed by the bank's shareholders plus accumulated retained profits. D) the sum of the value of the bank's assets plus the value of the bank's liabilities.
Why are international investors who have invested in developing nations favoring foreign direct investment and portfolio investment over loans?
A) The process of making loans is usually more difficult for investors to do than foreign direct and portfolio investment. B) The interest rate charged on the loans is usually lower than what can be earned in the U.S. C) It is illegal for banks to make loans to foreign firms. D) Investors have an aversion to owning dead capital and want to make sure that the resources they own do not become dead capital.
Using Figure 1 above, if the aggregate demand curve shifts from AD3 to AD2 the result in the long run would be:
A. P1 and Y2. B. P2 and Y1. C. P3 and Y1. D. P3 and Y2.
In long-run equilibrium, both purely competitive and monopolistically competitive firms will:
A. produce at minimum average total cost. B. earn economic profits. C. achieve allocative efficiency. D. equate marginal cost and marginal revenue.