When firms in a competitive market are experiencing zero economic profits, this is an indication that
A. There is currently no better way to use society's scarce resources.
B. Accounting losses are being experienced by these firms.
C. They should be producing a different product.
D. They will eventually go bankrupt.
Answer: A
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Once economists take into consideration changes in the expected inflation rate and supply shocks, the Phillips curve
A) only remains useful when explaining the long-run trade-off between unemployment and inflation. B) remains a useful tool for explaining the short-run trade-off between unemployment and inflation. C) is no longer a useful tool for explaining any trade-off between unemployment and inflation. D) accurately explains the short-run and long-run trade-offs between unemployment and inflation.
A price ceiling set below the equilibrium price is nonbinding
a. True b. False Indicate whether the statement is true or false
Even though free trade creates gains, some people still object to free trade because of the way those gains are distributed
Indicate whether the statement is true or false
Suppose we were analyzing the pound per Swiss franc foreign exchange market. If Switzerland's central bank intervenes to raise the value of the Swiss franc, then:
a. The supply of Swiss francs in the foreign exchange market rises, and England's monetary base rises. b. The supply of Swiss francs in the foreign exchange market rises, and England's monetary base falls. c. The demand for Swiss francs in the foreign exchange market rises, and England's monetary base rises. d. The demand for Swiss francs in the foreign exchange market rises, and England's monetary base remains unchanged. e. The demand for Swiss francs in the foreign exchange market rises, and England's monetary base falls.