Suppose all firms in a perfectly competitive industry are earning an economic profit. One would expect that, over time, the number of firms in the industry will ________ and the market price will ________.
A. rise; stay the same
B. fall; rise
C. rise; fall
D. rise; rise
Answer: C
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U.S. net export spending falls when
A) the inflation rate is lower in the United States relative to other countries. B) the growth rate of U.S. GDP is faster than the growth rate of GDP in other countries. C) the value of the U.S. dollar decreases relative to other currencies. D) the price level in the United States falls relative to the price level in other countries.
A temporary decrease in the price of oil would be considered a:
A. short-run supply shock. B. long-run supply shock. C. demand shock. D. The changing price of oil would not affect any of these.
For a major country with extensive capital flows, what is the effect of a decrease in interest rates?
a. a currency depreciation and increased net exports b. a currency depreciation and reduced net exports c. a currency appreciation and increased net exports d. a currency appreciation and reduced net exports
Much of each year's federal budget is considered "uncontrollable" because
A. Most of the current revenues and expenditures are the result of decisions made in prior years. B. It is determined by decision makers who do not have the power to change spending and taxes. C. It must be spent for purchases, as opposed to transfer payments. D. None of the choices are correct.