A decrease in AS will trigger more inflation under which of the following conditions?
a. AD is relatively steep.
b. AD is relatively flat.
c. AS is relatively steep.
d. AS is relatively flat.
a
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A perfectly competitive industry always has a perfectly elastic (flat) long-run supply curve
a. True b. False Indicate whether the statement is true or false
Which of the following observations is true? a. Monopolistically competitive sellers are price takers
b. Monopolistically competitive sellers treat price in the same manner as in perfect competition. c. Monopolistically competitive sellers regard price as a given by market conditions. d. Monopolistically competitive sellers are price makers.
In contrast to the structural deficit, the cyclical deficit reflects
A. Changes in discretionary fiscal policy. B. Fluctuations in economic activity. C. Fiscal policy decisions. D. Changes in the "full-employment" deficit.
If perfect competitors are making profits
A. new firms will enter the industry and market price will fall. B. new firms will enter the industry and market price will rise. C. firms will leave the industry and market price will rise. D. firms will leave the industry and market price will fall.