If the quantity demanded is infinitely responsive to any change in price, the demand curve is:
A. upward sloping.
B. downward sloping.
C. horizontal.
D. vertical.
Answer: C
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Passive macroeconomic policy would rely on natural market forces and automatic stabilizers to close an expansionary gap
a. True b. False Indicate whether the statement is true or false
Since 1960 the distribution of income in the United States has
A. become more equal. B. become less equal. C. remained about the same.
In a long-run equilibrium,
a. only a perfectly competitive firm operates at its efficient scale. b. only a monopolistically competitive firm operates at its efficient scale. c. neither a competitive firm nor a monopolistically competitive firm charges a markup over marginal cost. d. both a perfectly competitive firm and a monopolistically competitive firm operate at their efficient scale of production.
Rent controls create distortions in the housing market by:
A. increasing the supply of housing in the long run. B. raising property values. C. encouraging landlords to overspend for maintenance. D. discouraging new housing construction.