In the long run, perfectly competitive firms make zero economic profit (their owners earn a normal profit) because
A) any economic profit would attract newcomers to the industry.
B) the firms are incompetent.
C) any economic loss would increase the demand for the good, thereby raising its price.
D) there are many buyers and sellers.
A
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If the Fed follows the Taylor rule and the economy goes into a recession, the Fed would
A) raise the federal funds rate B) reduce tax rates. C) increase government expenditures. D) lower the federal funds rate. E) None of the above answers is correct.
Modern work in economic history by people like Robert Fogel (1964) and Albert Fishlow (1965) shows
(a) that railroads were the indispensable key to rapid economic growth in the 19th century. (b) that the levels of Gross National Product (GNP) reached in 1890 would have been reached in 1880 had it not been for reckless railroad speculation. (c) that less than 5% of the country's late 19th-century economic growth was attributable to railroads. (d) none of the above.
Which of the following program(s) examples is (are) in-kind assistance to fight poverty in the United States?
a. Medicaid b. Negative income tax c. Supplemental security income (SSI) d. Aid to Families with Dependent Children (AFDC) e. Welfare checks
When inflation occurs,
a. real wages must necessarily fall. b. real wages must necessarily rise. c. workers will experience falling real incomes. d. workers' real income may rise or fall.