If the North American newsprint paper market is a monopoly, then:
a. abnormally high profits will attract the entry of new firms
b. the entry of new firms will eventually cause price to decline.
c. the quantity produced in the market is larger than the socially optimal level of output.
d. entry will remain blocked even if the monopolist earns high profits in the short run.
d
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When the interest rate in the economy was 10%, the price of a bond with no expiration date that pays a fixed annual interest of $500 was $5,000. If the interest rate in the economy falls to 6%, the price of this bond will be about
A. $7,128. B. $4,700. C. $8,333. D. $5,030.
Suppose the development of the European Union leads to greater investment in Europe. You'd expect
A) a recession in Europe. B) a decline in the world real interest rate. C) a rise in the current account in Europe. D) an increase in the world real interest rate.
The combination of inflation and real growth shown by the AD curve give:
A. the same level of inflation. B. the same level of money supply growth. C. the same level of real GDP growth. D. the same level of nominal GDP growth.
Depreciation of the dollar relative to foreign currencies will tend to increase net exports and aggregate demand.
Answer the following statement true (T) or false (F)