What will happen in the long run if businesses in perfect competition are experiencing losses?
A. Some sellers will go out of business, causing supply to decrease and prices to fall.
B. Some sellers will go out of business, causing demand to increase and prices to rise.
C. Some sellers will go out of business, causing supply to decrease and prices to rise.
D. Some sellers will go out of business, causing demand to increase and prices to fall.
Answer: C
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In practice, the Federal Reserve keeps the discount rate close to the ________ rate in order to avoid large swings in borrowed reserves by banks
A) inflation B) prime C) six-month Treasury bill D) federal funds
Which of the following is a price floor?
A) rent controls B) minimum wage rates C) a freeze on upward-moving gasoline prices D) college tuition caps
Which of these partly accounts for the long-term growth in production in the U.S. economy?
a. An increase in government spending b. An increase in the availability of resources c. A reduction in federal taxes d. A gradual but consistent increase in the price level e. A general optimism about the future and the pioneering spirit of America
Under the flexible exchange rate system, when a country tries to stimulate economic growth and improve its employment rates, it is likely to cause:
a. the domestic inflation rate to rise and the domestic currency to depreciate. b. the domestic inflation rate to rise and the domestic currency to appreciate. c. the domestic inflation rate and the value of the domestic currency to remain constant. d. the domestic inflation rate to fall and the domestic currency to appreciate. e. the domestic inflation rate to fall and the domestic currency to depreciate.