At the long-run equilibrium output level, a monopolistically competitive firm's average total cost curve
a. lies below the demand curve
b. is tangent to (just touches but does not cross) the demand curve
c. crosses the demand curve from below
d. crosses the demand curve from above
e. is at its minimum point
B
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When prices do not change very much, the income-expenditure model can be used to understand economic fluctuation in the
A) long run. B) fiscal year. C) short run. D) federal budget allocation.
As a result of an increase in the money supply, some banks may end up with excess reserves. What is the likely result?
A) Banks will raise interest rates. B) Banks will make more loans, thereby contributing to a decrease in aggregate demand. C) Banks will make more loans, thereby contributing to an increase in aggregate demand. D) Banks will spend the excess reserves by paying their employees more.
The Ricardo-Barro effect is based on the idea that ________ when the government has a budget deficit
A) investment demand increases because expected future profits increase B) people decrease their private saving C) investment demand decreases because of the higher real interest rate D) people immediately increase their tax payments E) people increase their private saving
In the Romer model, as more labor is devoted to research and development there is ________
A) an immediate increase in output per capita and a permanent increase in output per capita B) an immediate decrease in output per capita and a permanent increase in output per capita C) an immediate increase in output per capita and a permanent decrease in output per capita D) an immediate decrease in output per capita and a permanent decrease in output per capita