If a market is contestable, then
A. long-run economic profits are minimal due to inefficiency.
B. long-run economic profits are zero.
C. short-run and long-run economic profits are zero.
D. positive economic profits are maximized due to the efficient production spurred by the threat of entry.
Answer: B
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The figure above shows the market for bank reserves in Futureland. If the Bank of Futureland undertakes an open market sale of government securities that changes the quantity of reserves by $25 billion, then the federal funds rate will
A) remain at 4 percent a year. B) rise to 6 percent a year. C) fall to 4 percent a year. D) change, but more information is needed to determine by how much. E) None of the above answers is correct.
Refer to the figure below.________ inflation will eventually move the economy pictured in the diagram from short-run equilibrium at point ________ to long-run equilibrium at point ________, 
A. Rising; B; C B. Falling; A; C C. Falling; A; B D. Rising; A; C
How should per capita real Gross Domestic Product (GDP) be used?
A. Per capita real Gross Domestic Product (GDP) is a good gauge of a nation's quality of life because it takes into account a nation's cultural and spiritual values. B. It is a reasonably good measure of productive activity. C. It is an accurate measure of economic well-being. D. all of these
Assume the demand curve for product X shifts to the right. This might be caused by:
A. a change in consumer tastes that is unfavorable to X. B. a decline in the price of Z if X and Z are substitute goods. C. a decline in income if X is an inferior good. D. an increase in the price of Y if X and Y are complementary goods.