In this graph, which of the following shows that profits have been eliminated in the long run?
a. The MC curve is tangent with the MRLR
b. The ATC curve is tangent with DLR
c. The MC curve crosses DLR
d. The MC curve crosses ATC curve
b. The ATC curve is tangent with DLR
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A market in which competition and entry are restricted by the granting of a public franchise, government license, patent, or copyright is called a
A) legal monopoly. B) natural monopoly. C) single-price monopoly. D) price-discriminating monopoly.
The combined efforts of the Fed and the Treasury in response to the financial crisis following the housing market crash caused:
A. aggregate supply to shift left, but still far below its pre-crisis level. B. aggregate demand to shift right to its pre-crisis level. C. the opposite reaction, and aggregate supply shifted farther to the left. D. aggregate supply to shift right to its pre-crisis level.
One requirement for an effective nominal anchor is ________
A) price stability B) credibility C) fixed exchange rates D) rational expectations
If the MPC is 0.6 and if government purchases and net taxes both increase by $20 billion, by how much will equilibrium output change?
a. It will increase by $80 billion. b. It will increase by $20 billion. c. It will not change because the changes in government purchases and net taxes will cancel each other out. d. It will decrease by $20 billion. e. It will decrease by $80 billion.