If firms in a monopolistically competitive industry are operating with economic losses, over time we would see
A) firms alter their advertising rates until they made at least normal profits.
B) some firms exiting the industry, causing the market supply curve to shift to the left, raising price.
C) some firms exiting the industry, causing the demand curves of the remaining firms to shift to the right.
D) the firms working together to increase price and everyone's profitability.
Answer: C
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________ can trigger an expansion
A) An increase in autonomous expenditure B) A decrease in induced expenditure C) Equality between aggregate expenditure and real GDP D) A downward shift of the AE line E) A decrease in autonomous expenditure
As imports rose in 13 major industries studied by Shepherd, these U.S. producers, finding themselves at a cost and quality disadvantage relative to imported goods, initially responded by
a. improving technology b. exiting the industry c. seeking trade barriers d. asking that quotas and tariffs be removed e. raising prices to recoup their losses
The slope of a line that passes through the points (20, 30) and (40, 14) is
a. -5/4. b. -4/5. c. 4/5. d. 5/4.
Many studies indicate changes in monetary policy have most of their effect on aggregate demand about six months after the change is made
a. True b. False Indicate whether the statement is true or false