In a perfectly competitive market, the process of entry and exit will end when
a. price equals minimum marginal cost.
b. marginal revenue equals marginal cost.
c. economic profits are zero.
d. accounting profits are zero.
c
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Everything else held constant, the vertical section of the supply curve of reserves is shortened when the
A) discount rate increases. B) discount rate decreases. C) federal funds rate rises. D) federal funds rate falls.
Bond prices in the marketplace will fall when
A. interest rates fall. B. the company is losing money. C. interest rates rise. D. the company is making money.
According to classical economists, if we use the quantity theory of money equation P = MV / Q, and the growth rate of M equals the Q growth rate,
a. the price level increases b. the price level decreases c. the price level remains unchanged d. velocity is necessarily increased e. M1 is decreased
When the overall price level decreases, what is the effect on the economy?
a. There is an increase in the quantity of real GDP that producers are willing and able to supply.
b. Producers are willing and able to supply less real output.
c. Movement occurs along the short-run aggregate supply curve from point A to point B.
d. The short-run aggregate supply curve shifts leftward.