A stock variable:
a. Is measured at a point in time.
b. Is measured over a period of time.
c. Is an inconsistency in terms, because something cannot be a "variable" and a "stock" at the same time.
.A
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What happens if Firm A does not advertise but Firm B does advertise?
a. Firm A makes $125 million in profit while Firm B makes $50 million in profit.
b. Firm A makes $125 million in profit while Firm B makes $100 million in profit.
c. Firm A makes $50 million in profit while Firm B makes $125 million in profit.
d. Firm A makes $100 million in profit while Firm B makes $125 million in profit.
Given aggregate demand, a decrease in aggregate supply creates:
A. a higher price level and a higher GDP level. B. a lower price level and a higher GDP level. C. cost-push inflation. D. demand-pull inflation.
Which of the following items are included in money supply M2 but not M1?
A. Federal Reserve notes B. savings deposits C. coins D. checkable deposits
Suppose that a market is currently served by a single firm protected by high entry costs from any potential competition. Then imagine fixed entry costs gradually falling in a model where any competition will be with quantity as the strategic variable. Describe how you would expect output price to evolve as entry costs fall.
What will be an ideal response?