For a country with a fixed exchange rate and no sterilization: When the FE curve is flatter than the LM curve, a negative domestic spending shock to the IS curve creates a balance of payments deficit, which then causes the LM curve to shift to the left.
Answer the following statement true (T) or false (F)
True
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The maximum amount a rent seeker would pay for a monopoly is the ________
A) market price B) deadweight loss C) monopoly's economic profit D) monopoly's normal profit
Which of the following is true for both perfect and monopolistic competition?
A) Firms produce a differentiated product. B) Firms face a downward sloping demand curve. C) Firms produce a homogeneous product. D) There is freedom of entry and exit in the long run.
Specialization occurs because
A. people have different skills. B. society trades current consumption for future consumption. C. society produces at the production possibilities curve. D. the production possibilities curve tends to be linear.
An indirect tax is a tax paid by consumers
A) to a state or local government. B) when they purchase goods and services. C) on unearned income (as opposed to wages and salaries). D) that is a percentage of the value of their real property.