If a firm in monopolistic competition is earning an economic profit,
A) it is in the long run.
B) other firms can enter the market.
C) it can do so because it is "monopolistic" and other firms will have a hard time competing with it.
D) its average cost must exceed its marginal cost.
E) The question errs because firms in monopolistic competition cannot earn an economic profit.
B
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To maintain a fixed exchange rate, in response to an increase in the government budget deficit the central bank must
a. sell foreign currency from reserves. b. buy foreign currency. c. raise taxes. d. raise government spending. e. pass a law that increases the exchange rate.
Many of the Founding Fathers considered the emancipation of slaves to be
(a) a necessary evil in overcoming the British during the war. (b) less important than the issues of whether blacks should be prevented from coming to the United States and whether freed slaves should be deported. (c) paramount in establishing the new nation on a solid ideological foundation. (d) a states' rights issue.
A sub-prime loan is a loan extended to borrowers
a. at a subsidized interest rate below the prime rate normally offered to the most creditworthy borrowers. b. with blemished credit or limited documentation of their income, employment history, and other indicators of credit worthiness. c. seeking a 30-year, fixed rate mortgage. d. who have a FICO score above 660.
Use the following table which shows the aggregate demand and aggregate supply schedules for a hypothetical economy to answer the next question.Real Domestic Output Demanded (in billions)Price Level (index value)Real Domestic Output Supplied (in billions)$3,000350$9,0004,0003008,0005,0002507,0006,0002006,0007,0001505,0008,0001004,000The equilibrium price and output levels will be ________.
A. 250 and $7,000 B. 200 and $5,000 C. 300 and $8,000 D. 200 and $6,000