Explain what will happen if firms in a monopolistically competitive industry are earning positive economic profits
What will be an ideal response?
Positive economic profits will attract new firms into the industry. The new firms will produce a product that is slightly different attracting customers away from existing firms. The demand curves of the existing firms will shift downward until economic profits equal zero.
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If the rate of inflation is 4 percent and the real interest rate is 3 percent, the nominal interest rate should be
A. 1 percent B. 4 percent C. 7 percent D. 11 percent
Of the following high-income countries, which has the highest infant mortality rate?
A) Canada B) Japan C) the United Kingdom D) the United States
Discuss how size of government can negatively affect economic growth
Which of the following expenditures would increase the investment component of U.S. GDP?
A. You purchase 1,000 shares of stock. B. You purchase a new car. C. You pay a commission to your stock broker for selling some stocks that you owned. D. You purchase a new house.