When good weather speeds the check-clearing process, float tends to ________ causing the Fed to initiate defensive open market ________
A) decrease; sales
B) decrease; purchases
C) increase; sales
D) increase; purchases
B
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If the market for a product begins as perfectly competitive and then becomes a monopoly, there will be a reduction in economic efficiency and a deadweight loss
Indicate whether the statement is true or false
If the government increases aggregate demand when the economy is at both short-run and long-run equilibrium, the full long-run effect of this fiscal policy will be to
A) increase real Gross Domestic Product (GDP). B) increase the price level. C) increase either the real Gross Domestic Product (GDP) or the price level, depending on the length of the time lag. D) decrease both real Gross Domestic Product (GDP) and the price level.
If P equals the price level expressed as an index number and $V equals the value of the dollar, then:
A. P = $V - 1. B. $V = 1/P. C. 1 = $V/P. D. $V = P - 1.
When monopolistically competitive firms earn ________ economic profits, other firms ________ an industry in the long run.
A. negative; enter B. zero; exit C. zero; enter D. positive; enter