If there are no barriers to entry into an industry
A) short-run economic profits must be zero.
B) long-run economic profits must be zero.
C) both short-run and long-run economic profits must be zero.
D) short-run and long-run profits must still be positive.
Answer: B
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Consider a downward-sloping demand curve. When the price of a normal good increases, the income and substitution effects
A) work in the same direction to increase quantity demanded. B) work in the same direction to decrease quantity demanded. C) work in opposite directions and quantity demanded increases. D) work in opposite directions and quantity demanded decreases.
Given upward-sloping supply curve, all other things remaining constant, a decrease in demand will lead to a(n) _____
A) increase in supply. B) decrease in supply. C) increase in quantity supplied. D) increase in the equilibrium price. E) decrease in the equilibrium price.
The equation of exchange states that the money value of GDP must be equal to the product of the money stock times its velocity
a. True b. False Indicate whether the statement is true or false
Which of the following was most responsible for bringing the Great Depression to an end?
a. the increase in industrial demand due to the military build-up prior to World War II b. the expansionary monetary policy of the Fed during the 1930s c. the New Deal policies that expanded government spending, stimulated demand, and increased output d. the increase in import tariffs that saved jobs and expanded total employment