The entry of new firms into a monopolistically competitive industry will cause the long-run equilibrium price to rise.
Answer the following statement true (T) or false (F)
False
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The Second National Bank of Townville has $400,000 in checking deposits, $125,000 in savings deposits, $500,000 in loans, $20,000 in its reserve account at the Fed, and $5,000 of currency in its vault. What is the amount of its reserves?
What will be an ideal response?
Market structure
a. has no influence on a firm's decision making b. applies only to industries regulated by the government c. is determined entirely by demand conditions in the industry d. influences the forms of competition among firms e. does not affect product price or quantity of output
Briefly discuss the similarities and differences of the effects of an import quota and a tariff on domestic price, quantities, and well-being, for a small country producing and selling a product in a competitive world market. (Assume a tariff level that would restrict imports just as much as the quota would.)
What will be an ideal response?
The Fed increases money supply. In this case, the time lag problem of monetary policy may
A. increase real GDP in the short run. B. decrease the velocity of money in the short run. C. increase the velocity of money in the short run. D. none of the above