The value of money changes over time because:
A. the government collects taxes.
B. there is an opportunity cost of waiting for money in the future.
C. people prefer to save money rather than spend it immediately.
D. none of the reasons listed here cause the value of money to change over time.
Answer: B
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If firms in a monopolistically competitive industry experience short-run losses
A) some firms would like to exit the industry but find they cannot. B) firms increase prices further, until they make at least a normal return. C) firms increase advertising spending to increase demand, until they make at least a normal return. D) some firms exit the industry, causing the demand curves for the remaining firms to shift to the right until they earn a normal profit.
Explain how prices in a competitive market form --- and how they take the place of almost limitless information that a social planner would need if he tried to mimic the market outcome.
What will be an ideal response?
The Federal Open Market Committee (FOMC) is composed of
A) representatives from the governors of all 50 states. B) Presidents of 5 Federal Reserve regional banks and the Board of Governors. C) the 12 Presidents of the Federal Reserve regional banks. D) the Board of Governors, the Vice-President of the United States, and the Secretary of Treasury for the United States.
Discuss specific cases that lead to an increase in the concentration and market power from deregulation.
What will be an ideal response?