When the economy is in a recession, it
a. needs firms and people to borrow but few take advantage of the banking systems'willingness to loan at low interest rates
b. needs firms and people to borrow but few take advantage of the banking systems' willingness to loan because interest rates are typically high in recession
c. does not need firms and people to borrow from the banking system because firms and people are already earning less revenue because of the recession
d. needs people to save more so that banks will have greater deposits and could lend out more
e. reflects the fact that banks are typically loaned out and cannot finance further investment, which is part of the recession's problem
A
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Use the following figure to answer the next question.
If the initial aggregate demand and supply curves are AD0 and AS0, the equilibrium price level and level of real domestic output will be ________.
A. F and A, respectively B. G and B, respectively C. E and B, respectively D. F and C, respectively
All competitive firms earn zero economic profit in both the short run and the long run
a. True b. False Indicate whether the statement is true or false
In order to be effective, a price floor
A) must be set below equilibrium price. B) must be set above equilibrium price. C) must be set at equilibrium price. D) must be a zero price.
A firm in a monopolistically competitive market can earn both short-run and long-run profits
a. True b. False Indicate whether the statement is true or false