What involves taking the risks that are necessary to seek out business opportunities?
A. Invention
B. Benchmarking
C. Averaging
D. Entrepreneurship
Answer: D
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One could argue that price competition among oligopolistic firms is highly likely to cause the revenues of individual firms to decline, while competition on the basis of product differentiation could cause demand, and total revenues, of individual
firms to increase. Indicate whether the statement is true or false
In the open-economy ISLM model, the goods market equilibrium condition is
A) output = consumption + investment + government spending. B) output = consumption + investment + government spending - tax. C) output = consumption + investment + government spending + net export. D) output = potential output.
Suppose the Fed has just learned that some foreign economies are headed for recession, which will reduce U.S. exports. This is an economic shock that shifts the IS curve down
What would you do in response to the shock if you want to keep the economy at full-employment equilibrium under each of the following cases? (a) You use the classical (RBC) model. (b) You use the Keynesian (efficiency wage) model. (c) You use the extended classical model with misperceptions. In each case, show the IS—LM—FE diagram associated with your answer.
The short-run Phillips curve portrays a(n):
a. direct relationship between total employment and the inflation rate b. inverse relationship between inflation and total employment. c. direct relationship between the unemployment rate and the inflation rate. d. inverse relationship between the unemployment rate and the inflation rate. e. inverse relationship between the price level and the unemployment rate.