When will new firms enter a perfectly competitive market? When does entry stop?
What will be an ideal response?
New firms will enter a perfectly competitive market as long as the existing firms are making an economic profit. Essentially the new firms enter in order to make an economic profit themselves. Entry will stop when it is no longer possible to make an economic profit, which occurs when the existing firms are making zero economic profit.
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Monetarists assume that there is a powerful direct link between aggregate demand and
A) velocity. B) real money balances. C) wage rates. D) interest rates.
Between the summer of 2005 and April 2008, the Chinese yuan ___ against the U.S. dollar
A. appreciated by 5% B. appreciated by 21% C. depreciated by 5% D. depreciated by 20%
Which of the following is an example of financial intermediation?
a. John buys shares of stock issued by a fast food company. b. A foreign government buys bonds issued by the U.S. Treasury. c. Susan makes a deposit at a bank and the bank uses this money to make an auto loan to Ferguson. d. None of the above is correct.
Refer to the information provided in Figure 24.1 below to answer the question(s) that follow.
Figure 24.1Refer to Figure 24.1. The equilibrium level of aggregate expenditure is $________ billion.
A. 4,000 B. 3,000 C. 2,000 D. 1,500