In a long-run equilibrium,
a. excess capacity applies to monopolistically competitive firms but not to competitive firms.
b. zero economic profit applies to competitive firms but not to monopolistically competitive firms.
c. markup over marginal cost applies to both monopolistically competitive and competitive firms.
d. product variety externalities apply to both perfectly competitive firms and monopolistically competitive firms.
a
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Based on the following information, what is the balance on the current account?
Exports of goods and services = $5 billion Imports of goods and services= $3 billion Net income on investments = -$2 billion Net transfers = -$2 billion Increase in foreign holdings of assets in the United States = $4 billion Increase in U.S. holdings of assets in foreign countries = -$1 billion A) -$2 billion B) $1 billion C) $3 billion D) $4 billion
According to the theory of exchange-rate adjustments, a country with a current ________ is likely to experience a currency ________
A) deficit; depreciation B) surplus; depreciation C) deficit; appreciation D) surplus; devaluation
The most likely explanation for economies of scale is
a. coordination problems. b. specialization of labor. c. increasing marginal cost. d. decreasing marginal cost.
Assuming that the interest parity condition holds, what type of information is contained in interest rate differentials between domestic and foreign bonds? Explain
What will be an ideal response?