Using the liquidity-preference model, when the Federal Reserve increases the money supply,
a. the equilibrium interest rate decreases
b. the aggregate-demand curve shifts to the left.
c. the quantity of goods and services demanded is unchanged for a given price level.
d. the short-run aggregate-supply curve shifts to the right.
a
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The reason economists consider monopoly to be socially undesirable is that monopolists:
A. can charge any price they want. B. produce less than the socially optimal level of output. C. earn too much economic profit. D. exploit the inelastic nature of demand.
Suppose a perfectly competitive market is in long-run equilibrium. If there is a permanent increase in demand,
A) at least in the short run, some firms will increase their output. B) at least in the short run, the price will increase initially. C) new firms will enter the market. D) All of the above answers are correct.
When it takes one firm in an industry to produce the quantity necessary to realize low unit costs, the industry
A) experiences economies of scale. B) has barriers to entry due to ownership of resources. C) has no barrier to entry. D) has a license granted by the government.
A discouraged worker is an individual who has been unemployed for a significant amount of time and has given up looking for a job because he or she is demoralized about his or her job prospects
a. True b. False Indicate whether the statement is true or false