If output is rising and unemployment is falling, the economy must be in a(n)
A. hyperinflationary period.
B. contraction.
C. expansion.
D. depression.
Answer: C
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Other things being equal, the quantity theory of money suggests that any increase in the money supply
A) results in a decrease in the aggregate price level. B) causes the aggregate level of nominal Gross Domestic Product (GDP) to fall. C) causes a reduction in the demand for money. D) results in a proportionate increase in the price level.
In a monopolistically competitive market with Dixit-Stiglitz preferences, equilibrium price falls as the goods in the differentiated product market become more substitutable.
Answer the following statement true (T) or false (F)
The opportunity cost of going to college is
a. the total spent on food, clothing, books, transportation, tuition and other expenses. b. zero for students who are fortunate enough to have all their college expenses paid by someone. c. the value of the next best opportunity a student gives up to attend college. d. zero, since a college education will allow a student to earn a larger income after graduation. e. infinite, because there's no way you can ever get your time back.
Both a perfectly competitive firm and a monopolist:
A. always earn an economic profit. B. maximize profit by setting marginal cost equal to marginal revenue. C. maximize profit by setting marginal cost equal to average total cost. D. are price takers.