As firms enter a monopolistically competitive market in the long run:
A. price increases, the market quantity demanded increases, and the quantity supplied by an individual firm increases.
B. price decreases, the market quantity demanded increases, and the quantity supplied by an individual firm decreases.
C. price decreases, but firm profits increase as average costs decrease.
D. price increases and firm profits increase.
Answer: B
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Most of the day-to-day power in monetary policy decisions lies with
A) the President of the United States. B) the Senate Banking Committee. C) the chairman of the Board of Governors. D) large commercial banks.
If the government cuts taxes ________
A) disposable income falls B) planned expenditures rise C) the IS curve shifts to the left D) all of the above E) none of the above
The index of leading economic indicators: a. provide accurate information on the duration of downturns in the economy
b. virtually always predicts downturns in the economy with a lead time of six months. c. can result in a self-fulfilling prophecy if business firms respond to leading economic indicator predictions. d. provide accurate information on the depth of downturns in the economy.
Perfect income equality means:
A. people earn different amounts based on what they do, but everyone in the same job earns the same amount. B. everyone earns the exact same amount. C. everyone enjoys exactly the same standard of living. D. everyone earns exactly what they're worth.