Firms cannot enter an industry in which positive profits are being earned in
A. the short run.
B. the long run.
C. the short run and in the long run.
D. As long as positive profits are being earned, firms can enter the industry in both the short run and the long run.
Answer: A
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The policy tool of changing reserve requirements is
A) the most widely used. B) the preferred tool from the bank's perspective. C) no longer used. D) still used, even with its disadvantages.
When the official price for goods and services is below the equilibrium price in a market, prices no longer perform their rationing function efficiently
a. True b. False Indicate whether the statement is true or false
Which of the following policy actions by the Fed would cause the money supply to decrease?
a. An open market purchase of government securities. b. A decrease in required reserve ratios. c. A decrease in the discount rate. d. An open-market sale of government securities.
In the ________ range of the aggregate supply curve, expansionary fiscal policy causes aggregate ________ to increase, which results in a higher price level and a higher equilibrium level of real GDP
a. intermediate, demand b. classical, demand c. Keynesian, supply d. intermediate, supply