Define monopolistic competition
Monopolistic competition is a market structure where many producers of somewhat different products compete with one another. There are many industries in the United States, particularly in retailing, which are monopolistically competitive.
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If rent-seeking behavior does occur, then the deadweight loss from monopoly practices is smaller than it otherwise would be
Indicate whether the statement is true or false
As the interest rate falls,
a. the quantity of money demanded falls, which would reduce a shortage. b. the quantity of money demanded falls, which would reduce a surplus. c. the quantity of money demanded rises, which would reduce a shortage. d. the quantity of money demanded rises, which would reduce a surplus.
Which of the following events occurred during the 2000 to 2005 time-frame and had an important impact on the deficit/surplus projections?
A. The steep decline in taxable capital gains that resulted from declines in the Stock Market from March 2000 to the end of 2002 B. The decrease in unemployment rates from 2002 to 2003 C. The increase in interest rates from 2001 to 2003 D. The increase in inflation rates from 2000 to 2002
Use the classical (RBC) IS-LM-FE model to show the effects on the economy of a temporary adverse supply shock; for example, an increase in the price of oil. You should show the impact on the real wage, employment, output, the real interest rate, consumption, investment, and the price level.
What will be an ideal response?