Monopolistically competitive firms ignore the effect of their decisions upon other firms in the industry because
a. each firm is large relative to the market
b. each firm is small relative to the market
c. there are few sellers in the market
d. there is only one seller in the market
e. all firms follow the same known pricing rules
B
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If a 200 billion dollar increase in government spending occurs when the Fed seeks to maintain a fixed interest rate then
A) there is no crowding out, the LM curve shifts to offset the shift in the IS curve. B) there is no crowding out, the monetary policy is fixes as is the LM curve fixed. C) crowding out is assured since monetary policy is fixed. D) crowding out is assured since the Fed will accommodate the spending increases.
The Federal Reserve banks are owned by: a. the citizens of each Federal Reserve district. b. the American people as a whole
c. the Federal Government. d. commercial banks.
Economists can accept limits on gambling because
A. addiction psychology distorts the gambler's ability to make rational choices and gamblers impose costs to innocent third parties. B. no one wins in gambling. C. gamblers impose costs on innocent third parties. D. addiction psychology distorts the gambler's ability to make rational choices.
The purchasing power parity theory is useful in making ____ predictions about exchange rates and their fluctuations.
A. long-run B. intermediate-run C. medium-run D. short-run