Suppose firms in a perfectly competitive market are incurring an economic loss. As firms exit, the price ________ and the economic loss of the surviving firms ________
A) rises; increases
B) rises; decreases
C) falls; increases
D) falls; decreases
B
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One theory of unemployment argues that the unemployment rate will rise when
a. people have accurate expectations regarding the inflation rate. b. unexpected inflation causes people to be "fooled" by high absolute wages. c. people mistakenly believe their wages have greater purchasing power. d. people overestimate the rate of inflation.
The Internet has created some special problems of intellectual property. One problem is that the
a. Internet is a monopoly, so the price of intellectual property exceeds marginal cost b. Internet market has not yet reached equilibrium c. property that can be downloaded, modified, and then re-sold d. marginal cost of enforcing property rights exceeds the marginal benefit e. price of intellectual property usually exceeds the marginal benefit
Fixed investment includes all of the following except:
a. all purchases by businesses that add to their inventories b. all spending on capital goods. c. all spending on producer goods. d. all spending on goods that increase future production capabilities.
If the Fed has a goal of stable real GDP and government spending increased, which of the following would occur?
a. The money demand would not change, real GDP would not change, the interest rate would decrease, and there would be partial crowding out. b. Money demand would not change, real GDP would not change, the interest rate would increase, and there would be complete crowding out. c. Money demand would increase, real GDP would not change, the interest rate would increase, and there would be partial crowding out. d. Money demand would not change, real GDP would increase, the interest rate would decrease, and there would be complete crowding out. e. Money demand would increase, real GDP would not change, the interest rate would decrease, and there would be complete crowding out.