When economic profits in a perfectly competitive industry are positive
A. firms will increase output to earn even higher profits.
B. firms will increase prices while they have the opportunity.
C. new firms will be attracted to the industry, and economic profits will decline to zero.
D. the industry is in equilibrium.
Answer: C
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A bank has $2 million in checkable deposits. In the bank's balance sheet, this would be part of
A. liabilities. B. net worth. C. capital stock. D. assets.
An intertemporal budget constraint
A) requires the present value of consumption to be equal to the present value of production. B) requires total spending in each period to be equal to total consumption in each period. C) does not take into account the ability to borrow or loan goods domestically. D) categorizes income into permanent and temporary income. E) limits consumption to the amount produced in each time period.
Over the past 25 years, child mortality has ________ and literacy has ________ in developing countries.
A. fallen; fallen B. risen; risen C. fallen; risen D. risen; fallen
Evaluate the following statement and illustrate your answer with aggregate demand and aggregate supply curves: In the short run, if an economy experiences inflation of 10 percent, the cause of the inflation is unimportant. Whatever the cause, the only important issue the government needs to be concerned with is the 10 percent increase in the price level