In long-run equilibrium, a monopolistically competitive producer achieves:
A. neither productive efficiency nor allocative efficiency.
B. both productive efficiency and allocative efficiency.
C. productive efficiency but not allocative efficiency.
D. allocative efficiency but not productive efficiency.
Answer: A
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When the balance of trade is in balance, we know with certainty that
A) the value of all debit transactions equals the value of all credit transactions. B) the value of exports of goods equals the value of imports of goods. C) the value of capital exports equals the value of capital imports. D) the value of exports of goods and services equals the value of imports of goods and services.
As inflation drives up prices, people attempt to find substitutes and adjust what they buy. The resulting substitution bias problem causes the CPI to:
a. overstate the impact of higher prices on consumers. b. consistently underestimate the true inflation rate. c. omit the benefits of product quality improvements. d. have larger fluctuations than other price indexes.
Which of the following best describes the distinguishing characteristics of business cycles?
What will be an ideal response?
A real estate salesperson sells a house in 1999 that was built in 1990. How does this transaction get counted in the GDP statistics?
What will be an ideal response?