A necessary condition for the operation of a perfectly competitive market is free entry and exit from the market.
Answer the following statement true (T) or false (F)
True
As long as it's easy for existing producers to expand production or for new firms to enter an industry, economic profits won't last long. One of the driving forces of the competitive market is the relentless squeeze on profits.
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Starting from long-run equilibrium, a large decrease in government purchases will result in a(n) ________ gap in the short-run and ________ inflation and ________ output in the long-run.
A. expansionary; lower; potential B. expansionary; higher; potential C. recessionary; lower; potential D. recessionary; lower; lower
Use the following table with data for a private closed economy (an economy with only a private sector and no international trade) to answer the next question.All figures are in billions of dollars.Expected Rate of ReturnInvestmentConsumptionGDP10%$0$400$4008100500600620060080043007001,00024008001,20005009001,400An increase in the real interest rate from 2% to 6% will
A. increase the equilibrium level of real GDP by $400 billion. B. decrease the equilibrium level of real GDP by $400 billion. C. increase the equilibrium level of real GDP by $300 billion. D. decrease the equilibrium level of real GDP by $200 billion.
In the 1990s, Oprah Winfrey, the former national talk-show host, discouraged Americans from eating beef. She argued beef consumption could create major health problems, and, as a result, beef purchases and the price of beef fell substantially
Which of the following occurred? A) The supply curve of beef shifted to the left. B) The demand curve for beef shifted to the left. C) The supply curve of beef shifted to the right. D) The demand curve for beef shifted to the right. E) Neither the supply curve nor the demand curve for beef had changed.
The current account surplus is not
A) the trade balance. B) the excess of national savings over investment. C) private saving less government deficit. D) output less taxes and trade deficit.