A constant-cost industry will have
A) a perfectly elastic long-run supply curve.
B) a perfectly inelastic long-run supply curve.
C) an upward sloping demand curve in the long run.
D) an upward sloping supply curve in the long run.
A
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When the financial crisis started in August 2007, inflation was rising and the Fed began an aggressive easing lowering of the federal funds rate, which indicated that
A) the Fed pursued an autonomous monetary policy tightening. B) the Fed pursued an autonomous monetary policy easing. C) the Fed had an automatic negative response to inflation based on the Taylor rule. D) the Fed had an automatic positive response to inflation based on the Taylor rule.
The situation in which one firm can produce the total output of the market at lower cost than several firms is called a
A) natural monopoly. B) pure monopoly. C) ruling monopoly. D) cost monopoly.
When the rate of cyclical unemployment is zero, the:
a. natural rate of unemployment must also be zero. b. rate of frictional unemployment must be negative. c. economy must have entered a recessionary stage. d. Keynesian aggregate supply curve must be horizontal. e. economy is considered to be at full employment.
In the long run, a perfectly competitive firm maximizes profit so P = MC = AC
a. True b. False Indicate whether the statement is true or false