A perfectly competitive firm in the long run:
A. can earn positive or negative economic profits.
B. makes zero economic profits.
C. makes zero accounting profits.
D. can earn negative accounting profits as long as economic profits are positive.
Answer: B
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Tracy and Amy are playing a game in which Tracy has the first move at X in the decision tree shown below. Once Tracy has chosen either the top or bottom branch at X, Amy, who can see what Tracy has chosen, must choose the top or bottom branch at Y or Z. Both players know the payoffs at the end of each branch. 
The equilibrium to the game results in ________ for Amy and Tracy relative to what they could get if they could solve their ________.
A. lower payoffs; credible threat B. lower payoffs; commitment problem C. higher payoffs; commitment problem D. lower payoffs; prisoner's dilemma
If there is an increase in the price level in the classical model,
a. the equilibrium level of output will remain unchanged. b. real wages remain constant. c. money wages will rise proportionally. d. all of the above.
Someone in Germany has just ordered a U.S. car to be exported to Germany. In the U.S. balance of payments, this purchase is a(n)
A) accounting identity. B) special draw. C) surplus item. D) deficit item.
Approximately how long does it take for the successive increases in spending and output to be completed after an initial increase in investment spending?
a. Two years b. Ten years c. Six years d. One year e. Five years