The profit earned by a monopolistic competitor after the entry of new firms is ________
A) higher than the profit earned by the firm before the entry of new firms
B) lower than the profit earned by the firm before the entry of new firms
C) equal to the profit earned by a monopolist in the long run
D) higher than the profit earned by a perfect competitor in the long run
B
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An outright sale of government securities by the Fed
A) permanently increases bank reserves. B) temporarily increases bank reserves. C) permanently reduces bank reserves. D) temporarily reduces bank reserves.
Transfer prices can be set in such a way so as to maximize profits for an entire business
Indicate whether the statement is true or false
U.S.-based John Deere sells machinery to residents of South Africa who pay with South African currency (the rand)
a. This increases U.S. net capital outflow because the U.S. acquires foreign assets. b. This decreases U.S. net capital outflow because the U.S. acquires foreign assets. c. This increases U.S. net capital outflow because the U.S. sells capital goods. d. This decreases U.S. net capital outflow because the U.S. sells capital goods.
Suppose the price level falls. Because of fixed nominal wage contracts, firms become less profitable and they cut back on production. This is a demonstration of the
A. classical dichotomy theory of the short-run aggregate-supply curve. B. sticky-wage theory of the short-run aggregate-supply curve. C. misperceptions theory of the short-run aggregate-supply curve. D. sticky-price theory of the short-run aggregate-supply curve.