If you based your estimate on how long it took poor regions of the United States to catch up to the per capita incomes of the rest of the nation, how long do you believe it would take Eastern Europe to obtain per capita incomes comparable to those of Western Europe?
a. About one year.
b. About five to ten years.
c. About twenty five years.
d. Several generations.
d. Several generations.
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Which of the following statements is true?
A) Hours of labor that go into producing a product is a better unit of account than paper money. B) When money is used as a yardstick to describe the price of various goods and services, it is serving as a store of value. C) The necessary condition required for money to function as a medium of exchange is that it also needs to be a store of value. D) One of the limitations of using money is that it does not allow for the transfer of purchasing power into the future.
If the quantity of money starts to grow more rapidly than real GDP and velocity does not change, the result is
A) slower growth in the price level. B) an increase in investment. C) more rapid growth in potential GDP. D) the inflation rate rises. E) an eventual slowing in the growth rate of the quantity of money.
A monopolistically competitive firm ________ in the long run
A) earns low but positive economic profits B) earns high economic profits C) earns zero economic profits D) incurs losses
Two firms would sometimes be better off if they got together and agreed to charge a high price, rather than to compete and risk having to charge a lower, competitive price. What is the greatest deterrent to this strategy?
A) One of the firms may decide to lower its price and take business away from the firm that charged the high price. B) The firms may find that the price they charge is greater than the price that would maximize their profits. C) An agreement by firms to charge high prices is illegal. The government can fine the firms and send their managers to jail. D) Consumers may resent having to pay high prices and not buy from either of the firms.