To make things simpler and focus attention on what really matters, economists
A) use assumptions. B) respond to incentives.
C) think at the margin. D) ignore all variables.
A
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Assume the firms in a monopolistically competitive industry initially are earning positive economic profits. Which of the following will not occur over time?
A) The firms' economic profits will be reduced. B) New firms will enter. C) Demand for the existing firms' output will become more inelastic. D) The number of substitutes available in the industry will increase.
The U.S. demand curve for foreign currency is drawn holding constant all except one of the following factors. Which is the exception?
a. income in the United States b. the inflation rate in the United States c. incomes in the rest of the world d. the interest rate in the United States relative to the rest of the world e. tastes and preferences of Americans for foreign goods
When the money supply and the price level in countries that experienced hyperinflation are plotted on a graph against time, we see that
a. the price level grew at about the same rate as the money supply. b. the price level grew at a much faster rate than the money supply. c. the price level grew at a much slower rate than the money supply. d. the inflation rate and the money supply growth rate do not appear to be related.
Based on the figure below. Starting from long-run equilibrium at point C, an adverse inflation shock that increases inflation from ? to ?1 will lead to a short-run equilibrium at point ________ creating _____gap. 
A. B; a recessionary B. A; an expansionary C. B; an expansionary D. A; a recessionary