In a constant-cost industry, a decrease in price causes:
A. some firms to exit the industry.
B. quantity supplied to remain constant.
C. some firms to enter the industry.
D. price controls.
Answer: A
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Which of the following statements about the beer industry is correct?
A) Over the last 30 years, technological change has resulted in substantial diseconomies of scale in the industry. B) In 2000, the minimum efficient scale in the industry was approximately 18 million barrels per year. C) As a result of an increase in the number of microbreweries, the five largest firms in the industry control less than 50 percent of the market. D) The market share of microbreweries was estimated to be 20 percent in 1990.
The horizontal segment of the aggregate supply curve:
a. shows that real GDP can increase only by affecting the economy's price level. b. shows that real GDP can increase without affecting the economy's price level. c. depicts a positive relationship between real GDP and the price level. d. depicts a negative relationship between real GDP and the price level. e. marks the full-employment level of real GDP.
The measure of how easily a particular asset can be converted quickly to cash without much loss of value is called:
A. liquidity. B. risk. C. intermediation. D. default line.
The difference between the equation of exchange and the quantity theory of money is that the
A. equation of exchange assumes that the level of real GDP is constant. B. quantity theory of money assumes that the Fed has no control over the money supply. C. equation of exchange assumes that the level of nominal GDP is constant. D. quantity theory of money assumes that velocity is virtually constant.