The business cycle refers to
A) fluctuations in the level of real GDP around potential GDP.
B) changes in the level of nominal GDP.
C) changes in the level of the stock market.
D) changes in the level of employment.
A
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In order for a Pigouvian tax to be efficient, the amount of revenue raised plus the economic value of the reduction in pollution must together be larger than the loss in consumer and producer surplus.
Answer the following statement true (T) or false (F)
How, other than by adjusting price, do firms in monopolistic competition compete?
What will be an ideal response?
Floating exchange rates are determined by the
a. forces of supply of and demand for currencies. b. governments with a trade surplus. c. governments with a trade deficit. d. IMF under the Bretton Woods Agreement.
A perfectly competitive firm has to charge the same price as every other firm in the market. Therefore, the firm
A) faces a perfectly inelastic demand curve. B) is not able to make a profit in the short run. C) is a price taker. D) faces a perfectly elastic supply curve.