If there are short-run profits in a perfectly competitive industry, in the long run new firms will ____________ and the industry-wide price will __________.
Fill in the blank(s) with the appropriate word(s).
enter the industry; fall
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Since 1950, the standard of living in the United States has:
A. decreased when measured by output per person, but increased when measured by total output. B. decreased when measured by both total output and output per person. C. increased when measured by output per person, but decreased when measured by total output. D. increased when measured by both total output and output per person.
Use the following table to answer the next question. The money supply and investment are in billions.Money Supply (billions of dollars)Interest RateInvestment (billions of dollars)$507%$100606110705120804130903140 Assume that the MPC is 0.8 and the reserve requirement is 0.1. If the Federal Reserve needs to increase aggregate demand by $100 billion at each price level to move the economy back to full employment and the current interest rate is 7%, then the Federal Reserve should ________ bonds on the open market equal to ________.
A. sell, $2 billion B. sell, $4 billion C. buy, $4 billion D. buy, $2 billion
If you purchased a newly issued 30-year bond from American Airlines with a face value of $1,000 and a coupon payment of 3 percent, American Airlines would pay you
A) $33.33 per year for 30 years plus $1,000 at the end of the 30th year. B) $30 per year for 30 years. C) $30 per year for 30 years plus $1,000 at the end of the 30th year. D) $33.33 per year plus 3 percent per year for 30 years.
Because Federal Reserve Notes (paper currency) are legal tender
A) U.S. workers must accept them as payment for labor services. B) the Treasury Department mandates that the United States will never become a cashless society. C) U.S. firms must accept them as payment for goods and services. D) None of the above are correct.