Entry of new firms causes
A) accounting profits to go to zero.
B) market share to grown.
C) economic profits to go to zero.
D) total revenue to be maximized.
C
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If capital inflows decrease due to higher interest rates in other countries and large amounts of import spending, there will be:
A) upward pressure on a country's exchange rate. B) downward pressure on a country's exchange rate. C) no pressure on a country's exchange rate. D) none of the above.
John has an economics test tomorrow. He must study and has planned the rest of his day so that he can fit some study time in. He has decided to go to the gym and then study for several hours. Which of the following statements is TRUE?
A) John did not use the economic way of thinking because his decision on how to allocate his time did not involve money. B) John's decision on how to allocate his time is inconsistent with the rationality assumption since he has decided to go to the gym. C) John's decision on how to allocate his time is consistent with the rationality assumption since the decision is intended to make him better off. D) John's decision does not involve his pursuit of self-interest.
The election campaign of George Bush to succeed Ronald Reagan as president was
A. hindered due to high levels of unemployment in 1988. B. hindered by the increasing inflationary problems of the late 1980s. C. helped by the budget surpluses generated in the last years of the Reagan administration. D. helped by the continuing low levels of unemployment and inflation in 1988.
Which of the following is a monetary policy action to eliminate a recession?
A. A decrease in the marginal tax rate. B. The sale of securities in the open market by the Fed. C. A decrease in the discount rate. D. Increased investment in job training programs.