Which is true for a purely competitive firm in short-run equilibrium?
A. The firm is making only normal profits.
B. The firm's marginal cost is greater than its marginal revenue.
C. A decrease in output would lead to a rise in profits.
D. The firm's marginal revenue is equal to its marginal cost.
Answer: D
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One criticism of the unemployment rate is that it
A) is a stock measure. B) does not include people who are not working and are not looking for work. C) does not include the number of discouraged workers as unemployed. D) counts a new entrant that is actively seeking work as unemployed.
In the income-expenditure model, at equilibrium GDP
a. either unemployment or inflation may occur. b. inflation can occur but unemployment cannot. c. unemployment can occur but inflation cannot. d. both unemployment and inflation are impossible.
If the required reserve ratio is 10 percent, a $100 deposit will ultimately allow the banking system to create how much money?
A. $190. B. $90. C. $1,000. D. $100.
Which of the following most likely involves buying an inferior service?
a. going on a cruise b. seeing a Broadway show c. streaming a video d. attending a rock concert